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February 16 Chart of the Day - Sony Group

Precision oriented price action technical analysis by far provides the best edges and most setups for traders across the markets so that's what we use for the basis of our reviews.

Sony Group (SONY) is making headlines this week after reporting earnings and forecasting weakness in its gaming business.

Share price is getting hammered...

But did the news really cause the drop or was it price action technical analysis?  

We were curious and wanted to review their chart.

On the monthly chart we can see well over 30 years of historical data with plenty of ups and downs.  During the last 10 years or so price went on a run making a series of higher highs and higher lows, by definition an uptrend.

But little more than a year ago price stalled out at $133.75 and has since fallen well below $100.  

Trading at $89.50 earlier today price has been rejected around the $100 area multiple times in the last year. 

Next we'll move down to the weekly chart and one of the first things we noticed was a change control zone roughly between $85 and $90.

Change control zones are one of the five price action tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.

Technically speaking, we suspect this zone was a driving force for pulling price back down from the $100 area.  

Price seemingly may have an upcoming decision to make.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.

Take a look at the charts and let us know what you think.  

We'd like to hear from you in the comments sections.

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