Value area

         Use the Value Area question to examine the relationship of yesterday’s, today’s or tomorrow’s value area to a variety of key price levels from surrounding days.

Example:

         Today’s value area is above yesterday’s close.

Questions from Traders:

         When today’s value area is above yesterday’s close, does the market hold these levels the next day? Where should stops be placed when this type of market action occurs?

Setting up the Search:

Click on the parts of the box below where appears for explanations of features.

Answers:

         Our search for value areas above yesterday’s close yielded 203 days. Further refinements show that on these days the market will close in the upper end of the day’s trading range (i.e., above the day’s longest TPO price) over 63% of the time.

Profile Analyzer Hint: A price which signals a high percentage trade can serve as a key warning price. For example, if the percentages favor a close above the longest TPO price, a close below the longest TPO price is often a precursor of further market weakness.