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Unformatted text preview: characteristically increases dramatically as the stock tops out. From here the market begins to retreat, usually due to profit taking, until it reaches a low, where supply begins to catch up with demand, and the stock rises again. The stock is now in a corrective phase. Following the corrective phase is another rally to test whether the price will go through that previously set resistance, completing the valley. The low point of the valley forms a support line. When the price reaches the previously set resistance and fails to go beyond, it creates another peak. This second peak indicates either a double top or another corrective phase. Frequently, the volume at the second peak is also noticeably larger, but usually less, than the volume at the first peak. When the price falls below the support, it completes the double top. At this point, it is a reversal....
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- Spring '10