To The Moon

What it Means to be Above/Below the Weekly Central Level When Analyzing Price Action

• Above the Weekly Central Level (Bullish Bias):

  • Short-Term Strength: When price action consistently trades above this level, it suggests a dominant bullish sentiment for the current week. This indicates that buyers are generally in control on a week-to-week basis.

  • Weekly Support: The weekly central level acts as a key support level. If price pulls back on a daily or intraday chart and finds support at the weekly central level, it's often seen as a good opportunity for bulls to re-enter or add to positions, expecting the uptrend to continue for the rest of the week. However, if the level is breached, there would be bearish confirmation and vice versa. I always check candlesticks and oscillators to improve probabilities of success when using the levels. When a level is crossed by a long green or red candle, conviction can be considered, but when price action prints a doji, hammer (for supports) or a shooting star (for resistances), a reversal is likely. I use 2Hour and 4Hour candles, but you can use 30 Minutes or 1H timeframes.

  • Targets Higher Resistance: Traders will often look for price to advance towards the weekly resistance levels (as mentioned in the weekly compass every Saturday, as the immediate bullish target if the price remains above the central level).

  • Confirmation of Uptrend: If you're seeing a daily uptrend, price staying above the weekly central level provides a strong confirmation that this uptrend has momentum on a larger, weekly scale.

• Below the Weekly Central Level (Bearish Bias):

  • Medium-Term Weakness: Conversely, if price action consistently trades below the weekly level, it signals a prevailing bearish sentiment for the current week. This indicates that sellers are generally in control.

  • Weekly Resistance: The weekly central level, in this scenario, acts as a key resistance level. If price attempts to rally on a daily or intraday chart but is rejected at the central level, it often suggests the bearish trend will continue for the remainder of the week.

  • Targets Lower Support: Traders will anticipate price declines towards the weekly support levels, beginning at the first bearish target that could provide support, otherwise the bearish momentum would accelerate towards the supports below.

  • Confirmation of Downtrend: If you're observing a daily downtrend, price remaining below the weekly central level confirms that this downtrend has significant weekly momentum.

• Setting Weekly Targets/Stops: Weekly levels can serve as targets or stop-loss references for swing and day trades. (The specific level can be reached, so the stops must have a prudent distance from it)

• Identifying Weekly Breakouts/Breakdowns: A strong close above the first weekly resistance (or bullish immediate target in my publications) or below the first weekly support (or immediate bearish target) can signal a significant move for the rest of the week or even longer.

In essence, the weekly central level serves as a "line in the sand" for the current week's directional bias. Daily fluctuations around this level will be interpreted in the context of whether the price remains above or below it. For stop loss remember that specific levels can be tested, so setting some distance

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