Cycle Trading

Pre-Summary

Breakout → resistance reclaimed + continuation pressure

Stocks had been consolidating below the 7150 level until Friday, where price closed above resistance and followed through higher on Monday.

From a cycle perspective, this move is occurring within a confirmed daily uptrend, with price holding above the 10 day moving average. The break above 7150 shifts that level from resistance to potential support.

Structurally, the prior consolidation allowed for compression beneath resistance, and the breakout suggests expansion is now underway. The move signals a cycle band buy signal within the daily cycle.

Confirmation will be needed through continued acceptance above 7150 and holding above the 10 day moving average.

What is clear is that the trend remains higher in the near term while price holds above former resistance.

However, the market is becoming short-term extended, and some consolidation or a backtest of 7150 would be a normal development.

If price holds above 7150, then the breakout remains valid and suggests continuation of the daily uptrend. If price closes back below 7150 and loses the 10 day moving average, then the breakout would be at risk of failure.

Cycle Alignment

Bullish