There’s a chance that the SPDR S&P Metals and Mining ETF (NYSE:XME) may be about to rally. And it’s because of seller’s remorse.
As you can see on the chart below, the important $48 price level was a resistance level. Each time XME reached it, the sellers put a ceiling on the price.
But now the price is higher and many of these investors regret selling.
A number of these remorseful sellers decide to buy their shares back, but only if they can get them for the same price at which they sold. As a result, they place buy orders at the price that was previously resistance.
If there are enough of these buy orders the level converts into support. That was the case on May 12 for XME and a move higher followed.
There’s a chance it happens again.
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