I've highlighted the trading ranges (green boxes) that we have spoke about in the past several posts. I've concluded that trading ranges are simply areas of accumulation/distribution before a larger move ensues. Once you have identified the trading range upper (resistance) and lower (support) limits all one has to do is wait for a break in that direction to jump on for the ride. This current move higher started with a break of the trading range from 1747 - 1741 where price quickly made its way to the next level of resistance at 1757. What I'm finding interesting is the volume profile on these trading ranges. What I've noticed for the past two break outs to the upside is the majority of the volume was transacted at the lower end of the range (support) prior to the break out to higher prices. What I'm theorizing is that during a trading range that is representing an accumulation phase that demand is greater support (lower end) then the supply at resistance (upper end) allowing prices to easily break higher. If this is true then the reverse should be true for a distribution phase. That is what I would like to investigate further. I'll keep you posted.
Thanks for reading.