Why Use S&R Levels To Trade?

“Tim, how should I trade Moderna?”

Even though I mostly day trade penny stocks, I get questions like this every day. The answer is simple. You can use the Oracle support & resistance (S&R) levels on any stock. Do they all work? Of course not. But it sure makes creating a trade plan easy.

Make This Trade At 9:30AM On Monday

The Big Picture

It comes up often, whether it be a large-cap stock or maybe a small-cap that doesn’t have enough volatility to land on Oracle.

You can still trade ‘em using the Oracle S&R levels.

Even though I’ve written about support and resistance before, I’m still shocked that more people don’t take S&R levels seriously.

We’ve had three great examples already this week…

Oracle S&R Works With Large-Caps and Small-Caps

Now, I know a lot of people don’t want to day trade large-cap stocks, but that’s exactly why you need to see the first example.

In premarket trading on August 25, Moderna Inc. (NASDAQ: MRNA) was consolidating with the Oracle major resistance (M/R) just above at $143.94.

The M/R is the top bright green line on the chart above. Along with the other green line and the horizontal solid orange line, the M/R is one of the Oracle S&R levels.

Look what MRNA did when it broke the M/R:

Now, that’s a small % move compared to what we usually day trade. But it illustrates the point. The Oracle S&R levels are valuable data points regardless of how big the company or float.

What about small-cap stocks without enough premarket volatility to show up on the Oracle scanner?

Here’s an example from August 25: Picard Medical, Inc. (AMEX: PMI) was consolidating just under VWAP with the M/R at $6.20.

Now look what PMI did once it broke through the M/R:

Do you see the similarities? Two stocks, one large-cap and one small-cap, with almost exactly the same setup on the chart.

Here’s one more: On August 26, Expion360 Inc. (NASDAQ: XPON) wasn’t volatile enough to hit the Oracle scanner, but we can still use the Oracle S&R levels:

Do you see how similar it is to the MRNA and PMI charts above?

Guess what? When XPON broke out above $7.02, a few minutes later it went to $11…

If you use the Oracle support and resistance levels, you were very happy this week.

Is the M/R a Buy or a Sell?

That depends.

A clean breakout above M/R can be a solid buy signal. But for stocks volatile enough to hit the Oracle scanner, the M/R is often above the buy signal. In that case, the M/R can be a great place to sell into strength.

Either way, I recommend using the Oracle algo and S&R levels to trade.

My Take

Every day there are stocks without enough volatility to show up on Oracle, that end up being great trades.

It baffles me why people refuse to take advantage of the Oracle tool. The same people that wish they could short sell, are the ones buying stocks like MRNA four hours after the spike because they didn’t use the S&R levels. Learn more about the Oracle tool here.

Watchlist

BTC Digital Ltd. (NASDAQ: BTCT) has been on the move since Bitcoin started bouncing last week.

The chart above includes 3 of the Oracle S&R levels: the pivot point (orange), M/R (bright green), and the next resistance at the August 24 HOD. If BTCT breaks through the M/R convincingly, it will flip the M/R up to the next level.

Keep BTCT on watch as long as Bitcoin keeps running.

On My Radar

• A 700-strong agent swarm? Higgins, pull up the drawbridge
• Nvidia earnings breathed new life into the AI trade
• Cisco rolled out 90,000 personalized AI agents for employees
• I prefer RCTs, but there’s another way to trade after-hours