We traded down to the nice rounded number just shy of $5300.

Remember those rounded numbers $5300, $5350, $5400 are natural support and resistance levels.

Everyone is watching them.

And we closed just shy of $5350.

So where do we go from here?

Friday’s action did create a nice hammer, which can signal the end of a downtrend, but we have a large gap.

With a gap, if the stock stays in that price area for a few days, it will usually continue in the same direction as the gap.

Unless we begin to rally and fill the gap, we will probably trade lower. 

I have support at $5260-$5250 and then $5200.

On the way back up, that old support at $5400 will now be resistance.

Trade Review

The Russell 2000 ETF (TIcker: IWM) moved before the opening and gapped down so no trade was made.