Perfect example why sometimes it’s not good to buy a dip in a stock Overhead supply is the hidden resistance zone created by traders who bought higher and are waiting to sell once price gets back to breakeven. When a stock rallies into that area, selling pressure can slow or reject the move. A clean break above it especially with volume can signal that the path higher is opening up. Always have overhead supply marked on your charts .
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6 Comments
Moe @moe_on_margin · 6h
What are good signs or flags of that over head supply ?
Keith McCarthy@aqueous120 · 20h
Excellent analysis. Sometimes buying the dip leads to you being the exit liquidity. Even if you're long, it could still be too your disadvantage.
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