Temple Inland, Inc. ($TIN) has enjoyed a steady climb after bottoming out in August at around $16.00. However, $TIN is now testing a major wall of resistance at $23.00, which could lead to a sizeable correction in the days ahead. Here’s why..
6-Month Resistance
A major wall of resistance has developed at $23.00 over the last six months, leading to several reversals during this period of time. In fact, each test of the $23.00 level has led to retracements ranging between 11% and 32%.
If price cannot rise above $23.00, we could see a sharp correction back toward prior value between $21.40 and $20.40, which would be a retracement of between 6% and 11%.
Confluence of Resistance
Not only is visual resistance clearly evident, but monthly pivot resistance has also emerged between $22.64 and $22.65. These price levels correspond to the monthly H4 Camarilla pivot level and the R1 Floor Pivot level, respectively.
When there is a clear zone of pivot confluence, in addition to visual resistance, you typically see a dose of responsive selling participation enter the market. As such, a bit of profit-taking could be seen.
Keep in mind, however, that a break above $23.00 could easily lead to a free ride to multi-year highs at $25.00. However, if recent price behavior repeats itself, another dose of selling is likely ahead. The $23.00 level will be the key.
Let’s see how this one plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
