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Windows Support and resistance in stock charts

In this article I will present to the practical use of the windows or even called gaps in price charts.

A window in a bar graph appears when the low price of the current bar is greater than the high price of the previous bar. A window in a bar graph appears when the high price of current bar is lower than the low price of the previous bar.

While a window is not closed, whole area of a window represents the support or resistance price movements in the future. In a window below the entire area of the window represents the resistance. This window is closed and therefore the resistance has no significance even when the price gets up and completely covers the window. Resistance is only broken when is penetrated by a closing price. The window size does not matter.

With a window above the entire area of the window represents a support. This window closes support and therefore has no meaning if the price turns down and completely covers the window. The aid will only be broken when one enters with a closing price. Once plus the window size is not important.

I will speak of four types of windows: the common, the window of the rupture, then window and the window of exhaustion. A broken window, the window below, and a window to exhaust represent a much more important support or resistance the common window. Windows are part of support and resistance in a chart and can be used to stop early because of his support, as well as price targets because resistance. According to the type of window we can expect to be in a reversal of the trend, a trend continuation of a trend or near completion.

A common window is so named because it is common in the evolution of the normal price. The most common Windows can be found during periods of consolidation price when the price moves sideways. A common window gives no indication of an expected price movement. In general, only be used as a level of support and resistance for the short term. On a daily chart, common windows are closed most of the time in a couple of weeks.

A separatist window will appear with a change in the trend of prices in the medium to long term. An escape window is increased at the beginning of a new uptrend. About three quarters of the increase separatist windows on a daily chart is only closed after one year. Only 2% will close within a week. In general, the break window is created with a high volume or a higher volume gradually a series of bars before the break.

About 60% of separatist windows down on a chart daily are also closed within a year and only 2% will close within a week. The breakaway window is created with a high volume or high volume gradually some of the bars before the break.

A maintenance window is half way through an ongoing trend, often following a pattern consolidation in the short as a flag or pennant, or a larger correction pattern, like a triangle or a rectangle. Almost all the windows below rising on a daily chart are closed in a year. Only about 5% will close within a week. The following window is usually created at high volume or greater volume a series of bars of the window before continuing.

Almost 100% of falling below the windows on a daily chart are also closed within a year and about 5% will be closed within a week. The window is then created high-volume or volume gradually increased a few bars before the window then fall.

The window is exhausted near the end of the ongoing trend. Often you will see a window with larger movements highly volatile prices. Almost all windows exhaustion growing on a daily chart are closed in a year. Up to half of them or 50% will close within a week. The window of exhaustion is usually created with a high volume or high volume in a series of bars of the window before exhaustion.

Almost all of the drop windows exhaustion on a daily chart are closed in a year. Up to half of them will close within a week. Generally, the window of exhaustion is created with a fall high volume or slightly higher volume in a series of bars of the window before falling from exhaustion.

As we have seen an uptrend or a downtrend in a break, continuation and exhaustion window is mostly created with a high volume or a higher volume gradually a series of bars before these windows. Also you will notice patterns often price charts before these windows. Windows, therefore more useful as a confirmation that indicates the pattern beginning of a new trend, the continuation of a trend or the end of a trend.

About the Author

Want to learn more and see some examples about stock chart window support and resistance? You can find learning material on basic technical analysis techniques for free at my website:
http://stocata.org
. Sylvain Vervoort is a trader and author with contributions to Stocks & Commodities Magazine.