Another stock which looks set to fall further and dramatically is ALX, and from a technical perspective, this stock is now testing a key level in today’s trading session as it trades at $357.69 at the time of writing. And the reason for this weak technical picture is the price pattern the stock has developed since early February coupled with the volume profile.

First to the important price levels, of which $355 is now extremely significant, as below this is virtually ‘fresh air’ all the way down to meaningful potential price support in the $315 area. Coupled with this, the volume histogram also has low volume from $350 through to $320, and again with such light volume, any move through here is likely to be rapid as a result.

And so the price pattern from early February to today, which has developed a classic head and shoulders, with the right-hand shoulder now being completed. Note also the volumes over this period which are dramatically higher than average and confirming the selling climax now coming to an end. The start of this climax was signaled on the 5th February with extreme volume and an upthrust candle on the day as the market makers sold out into a weak market. This was followed by the expected pattern of further selling into weakness coupled with a rally into the high on falling volume where further selling then ensued. Now we are waiting for the final piece of this cycle to complete with a reversal from a primary bullish trend into a primary bearish trend, with the trend monitor confirming this view.

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