Bluescope (BSL) needs to push through plenty of resistance

Hi everyone – I thought some charts may be just the thing for the long weekend in Australia so here is one to be going on with:

Source: Incredible Charts

This is a really fascinating chart because it is running a whole community of support/resistance levels simultaneously. My way of thinking is that this enables a number of entry/stop/pyramid opportunities all at once.

Firstly – take a look at the channel that the price is now in. A trader may choose a long position here with a stop under the low of the trough ($1.885). Trading the inside of the range offers a decent risk/reward trade.

Secondly – a trader may look at the bigger picture and place their stop around $1.80 with a view to price moving onward to $2.40 at the upper end of the horizontal range.

In both cases though the horizontal line at $2.05 is a key level – you can see that this has been a key support resistance level previously. This may make for a potential pyramid level if price breaks through allowing for stops to be tightened but the trader would likely be very cautious in the event that price fails to break this level.

All the best,

Dave.

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