Mixed Signals

21/03/2011 04:09

Often when the markets begin to consolidate, market participants will receive mixed signals, turning the market into a stock picker's market. The current market has the potential for more lateral movement. As such traders should see a more fractured environment. While at the surface many bases look similar, traders should monitor how the stock behaves at the fringe areas of the chart. If a stock slips under a support level and enough traders go under water, it could cause the entire base to act as resistance. If the stock emerges higher from the base, it could very well mean the opposite.