Sandisk Corporation (NASDAQ:SNDK) shares are giving back some of yesterday’s gains. They rallied almost 10% on Monday on analyst upgrades, and the stock is down over 8% on Tuesday.

While shares are trading lower, they may have broken out and may soon resume the uptrend. This is why SanDisk is the Stock of the Day.

The emotions of traders and investors can seriously affect how stocks trade. This can be seen on almost any chart, including this one from SanDisk.

As you can see on thsellingart, in June, the shares found support around $1,570. They rallied as anxious, impatient buyers began to outbid each other. When this happened, some of the people who sold came to regret their decision to do so. A number of them decided to buy their shares back if they could eventually get them at their sell price.

So, when the shares dropped back to $1,570 in early July, they placed buy orders. This created support and a move higher followed.

In late July, this support broke. At this point, some of the people who bought shares around the support regretted it. They vowed to sell at breakeven if eventually possible.

When the shares rallied back to $1,570, they placed sell orders. The large number of these orders created resistance at the price that had been support.

Seller remorse can keep support intact. Buyer remorse can convert support into resistance.

Now it appears that this resistance has been broken. This can be a bullish dynamic.

Resistance is a price that has a large number of sellers. If a stock gets above this level, it means the sellers are gone. They have finished or canceled their orders.

Markets move because of supply and demand. With this supply or sell orders out of the way, anxious and impatient buyers will need to outbid each other to draw some sellers back.

This means SanDisk may form a new uptrend.

Photo: jejim from Shutterstock