Weak Low / High

 Weak Low / High

 

A weak low (or high) is made when the session closes very near the low (or high) of the session. When this happens, there is no evidence of a rejection/reversal and there will likely be further price discovery in subsequent sessions to find a level where prices are judged unfair (leading to a reversal). 


To put it another way, the session closes with unfinished business.  This is especially true when it comes at the end of a strong session. 


A weak low below broken support is a good short candidate. A weak close right on support is trickier - hard to buy (possible if good confluence) but not a short either. These are easier to trade if the low is spiked and reversed in the next session, but this does not always happen so neatly.

 

Examples -

 

the ideal situation - the weak low is spiked the next session and a strong reversal transpires

 

 

this shows a strong move and weak close in the first bar down. This follows through the next session as expected. A weak close below support (200dma) looks dangerous, but is invalidated by the move back through the 200dma and strong close above the weak bar

 

 

this example looks like a weak close, but is actually a doji pattern and price never took out the opening price. A truly weak close drops into new lows near the end of the session.

 

an ugly bottoming pattern, but the weak low was invalidated the next session with the new highs and strong close.

 

a weak close followed by an inside bar and then a break higher (inside and up)