Not all levels are created equal. With all these technical indicators it seems that every ten cents could be a level. When we ask our guys to discuss levels we ask: on a scale of one to ten how important is that level? When we find important levels we expect a battle, and then for stocks to move away from these prices setting up excellent risk/reward trades. One important level can be a premarket resistance level. Exhibit A from today in FNSR.

In the premarket for whatever reason 25.50-25.60 was resistance in FNSR. It failed there a few times. Four to be exact. FNSR was trying to climb higher but got knocked down around this price consistently. Ok so now we have an important level from the premarket. Let’s put this to use.

After a battle at 25, FNSR found 25.50. A significant seller would not lift and then it did. FNSR bounced above and below the 25.50 level but it did not really trade lower like if for a failed breakout. Now Long 25.46 would work. Long and not hitting below 25.40 would work. Long above the high during this consolidation would work. This is us using the tape and our technical and our intraday fundamentals to make a safe and excellent risk/reward trade.

Measure your levels before you make a trade. And sometimes just sometimes we can find important levels from the premarket.

Mike Bellafiore
Author, One Good Trade