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| The last segment of a trend also marks the first segment of a new range. When the tape or chart action sends early warning of an impending change in trend, try to identify natural areas of support-resistance within this "transit zone". If gaps, shooting stars or short-term highs/lows are embedded within this area, they represent natural bounce points for the subsequent congestion and may yield quick scalps or swing trades. But if the last trend thrust doesn't extend far enough, the subsequent congestion isn't likely to support good reward:risk. |
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