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Strategies & Market Trends : Charts for Bottom Breakout -- Ignore unavailable to you. Want to Upgrade?

To: David Meyer who wrote (1686)	4/8/1998 2:08:00 PM
From: Ed Huang	Respond to of 3105

Overhead supply- I think this is mainly a simple psychology issue. Example, a stock had traded in a range say $10 - 11 for some time and many people bought in at this level(the chart shows heavy volume). Later the price dropped to $7 - 8, some days later it bounced back to $10 with relatively light volume. Since many people had bought the stock at around $10, they would take the opportunity to sell and get out even. In this situation, supply is more than demand, price would be likely to be pushed back down. TAers usually watch out this, and avoid to buy at the level with heavy overhead supply. If you observe some charts with this kind of situation, you will probably know better about it. Good trading.