FREE Guide: 6 Fibonacci Types that Create the Most Precise Price Levels, Targets, and Reversal Zones

September 19 Chart of the Day - Lennar Corp.

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Lennar Corp. (LEN) based in Miami, is one of the two largest builders of new homes and communities in some of the nation’s most popular cities.

When looking at any chart we like to see how far back in time there is historical price action to review and this chart doesn't disappoint!  There's price action dating back to the 1980s which can typically provide great insights into directional assessment and overall market sentiment.

With that being said, we start by taking a look at the monthly chart plotting only support and resistance.  This can provide a great "birds eye view" and often reveals significant historical levels. 

We can see the $91-$95 level has acted as a change control area.  Change control zones are one of the five 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.

Moving down to the weekly chart we can develop additional structure using Fibonacci and Trend.  

Anytime an uptrend and downtrend converge to create "cross hairs" like this chart it immediately gets our attention... But as we all know price rarely, if ever, moves in a straight line so we've identified levels of interest in both directions.

Ultimately, we're neither a bull nor a bear.  Simply a trader.

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

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

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