Lesson / WY-03-13
Preliminary Support (PS) usually follows a mature decline and marks the first area where supply encounters substantial buying support. Price may still make new lows, and trading activity and downward spreads may continue expanding, but a rally more significant than preceding countertrend moves then develops. It shows the first resistance to the original trend strong enough to leave a mark: sellers can still lower price, but need more trading to do so or can no longer retain the entire decline. PS suggests that a stopping process may have begun; it neither identifies the ultimate low nor means buyers have taken control.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗Timestamps
8 lessons · Chapter contents
01Phases and Events in the Accumulation Schematic↗02The Task of Phase A: Has the Decline Stopped?↗03Preliminary Support: PS↗04Selling Climax: SC↗05Automatic Rally: AR↗06Secondary Test: ST↗07Establishing and Revising Preliminary Range Boundaries↗08Nonstandard Phase A Structures↗Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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Phase B: Tracking Supply and Demand Within the Range
Phase C: Springs and Supply Tests
