Stocks breaking from consolidation – what can it mean?
Consolidation refers to a state of relative equilibrium between buyers and sellers where the area know as “support” is viewed as a “cheap” entry point while the upside is limited to the point known as “resistance” we’re traders view the security as over valued. When this key level of support or resistance gives way on a change in perception by market participants, this can create profitable trading opportunities. The upside target is often calculated by the depth of the channel the stock has broken from. It is also important to see that the underlying volume in the stock has increased significantly. A high level of volume can indicate the start of a strong move. One example on the market today could be; Jabiru Metals (JML).
