Basic TA: From Bearish To Bullish (Downtrend Broken)The worst mistake that can be made after being bearish when a market is not rising, is to be bearish when the market is rising.
Look at this chart, this is TOTAL2. This week is young, just last week there was a bullish breakout above the black descending (downtrend) line. Last week the bearish bias/trend was broken and the market enters and uptrend.
A mistake can be made to be bearish when the market is going down, because it turned. But an even worse mistake is to stay bearish when the market is clearly breaking up.
The correction is over and the bearish bias is nullify by a high volume bullish breakout. The bullish breakout confirms the start of a new bullish trend. Not the end, the start. The start of the bullish trend can go for months or even years. The correction is not starting, it is now confirmed over. The confirmation comes from the action switching from lower highs to higher highs and higher lows.
We had lower highs from 11-March until 28-October. We now have a higher high and this is supported by high volume. In this case, based on technical analysis and price action, we switch our bias from bearish to bullish.
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Namaste.
