CAT Weekly Opening Range

A trading range which is formed during first morning hours of the first trading day of a new week sets an important "Week Opening Range".

The lowest price made during the Monday morning session can be considered the Weekly Support level (see the green line drawn by the indicator).
The highest price made during the the Monday morning session can be considered the Weekly Resistance level (see the red line drawn by the indicator).

In an Up trending market price tends to break over the upper edge of the Weekly Opening Range and keep moving higher targeting R1 resistance level.
In an Up trending market once price broke out of the Weekly Opening Range, the broken Weekly Resistance level tends to work as a support.

In a Down trending market price tends to break under the lower boundary of the Week Opening Range and keep moving lower targeting S1 support level.
In a Down trending market once price broke under the Week Opening Range, the Weekly Support level tends to work as a resistance

There are many ways to use that instrument:

(1) Trend Confirmation.
The Monday morning trading session tends to bring volatile trading. The market sets boundaries for the following four trading days.
Once the range has been set, swing traders may wait for the market to break out of the range and consider that direction of the prevailing trend direction.

(2) Short "Failed Breakout" setup
Quite often price breaks out of the Week Opening Range on Monday afternoon but then drops back into the range.
That failed breakout quite often is followed by decline back down to the Weekly Support level (the lower edge of the Week Opening Range).

(3) Long "Failed Breakdown" setup
Quite often price breaks down under the Weekly Support on Monday afternoon but then pops back up over the Weekly Support.
That failed breakdown quite often is followed by a rally targeting to retest the Weekly Resistance (the red line).

The indicator generates signals, trade set-ups and alerts that are for educational and hypothetical purposes only and shall not be considered trade recommendations.
Any signals or trading setups drawn by the indicator is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All users of the indicator must determine for themselves what specific investments to make or not make and are urged to consult with their own independent financial advisors with respect to any investment decision.