Daily Range Projections

Tomorrow’s price range depends on the close and open prices correlation of the current day. There are three possible relationships between them:

if close < open, then X = ( H + L + C + L ) / 2;
if close > open, then X = ( H + L + C + Н ) / 2;
if close = open, then X = ( H + L + C + С ) / 2.

Forecast maximum tomorrow’s daily price equals: H+1 = X — L, and the forecast minimum tomorrow’s price is L+1 = X — H.

If the market opens within the forecast price range next day traders should expect the resistance level to be on the forecast maximum point, whereas the support level should be on the forecast minimum point.

• If the opening price does not fall within the forecast range it is possible to:
• ignore the forecast characteristics for this day or
• correct the range having moved the forecast minimum (maximum) a bit lower (higher) than the forecast maximum (minimum) if the market has opened higher (lower).