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| Channels and trendlines on both daily and intraday charts provide excellent short sale entry points. Draw lines across the tops of declining highs and across the bottoms of declining lows to locate these important levels. Watch as price moves toward the upper line. Does this level also point to other key S/R? Is there a major moving average there? Does price strike the top of your Bollinger Band while it contracts? If so, you've found cross-verification for your short sale. Position traders can also use the 50-day moving average to locate significant short-term resistance for markets in major downtrends. |
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