Last week, i blogged about BAC and this morning when i saw the price, i knew that it is constantly in a uptrend and marching towards a new high. BAC had been in a trading range since the day it broke out. Trading range offered a very deep insight of how big operators work. These trading range could be absorption for the market to move higher or absorption for it to move lower. Well, trading range is formed because of the heavy selling that took place earlier on and the big operators would need to slowly buy them back bits by bits and vice versa. This process sometimes take a long time and it tire out the public. Trading range is also the transferring of stocks from the hands of the weak holders to the strong holders. When trading range appears, public is always saying that oh the market is not moving higher/lower and is in the trading zone, not much money could be make. I totally agree with that, however if you understand trading ranges and how to spot them to your advantage, you could benefit handsomely from it.
See the oval area that i circled? I know these trading range is absorption for the market to trend higher. I am a vivid fan of trading range because it offers such a huge opportunity for big money to be made. I had been practicing my skill on trading range and i agree sometimes it is really difficult to determine. However, this time round for BAC, it is very easy to spot. Prices are congested into one confine area for a further breakout to happen. Psychologically, the big operators are making this stock to appear that it has lose its strength and starting to turn weak. The reason for doing so is to get you thinking that this stock is going to tank and luring you to sell so that they will buy more and further push up the price. There will be a time when the big operators would encourage the public to buy and that is time where prices are sky high and the public will be trapped where greed and fear starts to set in. That's where the big operators would be slowly unwinding their holdings and start taking hidden profits, however this had not appeared in BAC yet.
For those who had purchased BAC, good luck, it is on it's way to cloud 9. Saw the closing price for the last 2 days? It went up almost 70cents! For today, I presume it will be in a absorption mode again for it to trend higher, which is to say that BAC needs to take a break before it will continue its uptrend.
Ronald K
