We have seen a strong buyer off the open this morning, more as a response to the lower prices near the 5730 levels we had marked out as borderline in Monday’s post.
In profile a gap is considered a splendid risk-reward opportunity as it points to the presence of a longer time frame player in the markets. Incidentally, a gap is considered as a movement away from the previous day’s range ( high or lows), and not the difference in a close and open.
The open drive which was initially a gap-fill turned into a successful 80 % rule trade and current prices are up over 115 points from morning lows of 5750.
Of interest to us now, is two points :
a) staying above the 5850 level marked out in Monday’s post
b) the lower end of the double inside days from last week at 5880.
I have marked the double inside days as one single profile in the above chart.
You would have noted on Friday last, the market rejecting this entire zone from 5880-5936 in the move off the morning.
The rest of the chart is annotated.