What are the MagniZone zones? Why are some orange and some blue?
Quick answerEvery swing high on the chart becomes a zone: a price where sellers stepped in before. Orange is resistance above price. When a candle closes up through it, that is a breakout, and the zone turns blue: it is support now.
The details
How a zone is made
MagniZone finds the swing highs and lows: a high with 20 candles lower on each side. Each becomes a narrow zone around that price (a fifth of the stock's average range either side).
The colours
- Orange: resistance, a zone above price.
- Blue: support, a zone below price, or a resistance that broke.
- Grey signals on the big chart are drawn so you see what the chart is doing, but they are not calls.
What gets called
A close up through an orange zone (a Breakout Buy), or a dip back to a blue zone that holds (a Bounce Buy), when every line of the A-setup checklist passes (Breakout and Bounce Buys). More on support and resistance.
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