Home » Stock Chart



Stock Chart Stock Market

Support And Resistance Flips - Reading The Stock Chart

In the unending quest for strong, reliable technical signals, most chartists invariably tie their analysis to support and resistance. However, one recurring pattern that many traders miss is the support and resistance "flip" - a change in the trading range in which old support becomes new resistance (or in the opposite trend, old resistance becomes new support).

When you see a breakout above resistance or below support, you often don't know how or where to redefine the trading range. It has to be set anew and one of two things occurs: First, the breakout fails and prices retreat back to fill the trend (especially when gaps occur) and revert to the previous trading range. Second, new resistance and support levels are established. But where?

A likely scenario is that the trading range does not establish itself independently from the previous range. A breakout begins with a very strong gap through resistance or support, but does price reverse and fill to previous levels or stay in their newly-set range?

The support and resistance flip takes place often enough to be taken seriously as a trading pattern. The value is not only knowing it can happen, but in observing how reliably it sets a new trading range. Given volatility in stocks, any strong indicator is encouraging. The support and resistance flip is one example of a useful tool in anticipating price trends. Trendlines may be short and inconclusive or longer-term and confirming. In this volatile environment, the support and resistance flip is reassuring and adds confidence to your longer-term price forecast.

To gain more perspective on insights to trading observations and specific strategies, I hope you will join me at ThomsettOptions.com where I publish many additional articles. I also enter a regular series of daily trades and updates. For new trades, I usually include a stock chart marked up with reversal and confirmation, and provide detailed explanations of my rationale. Link to the site at ThomsettOptions.com to learn more.

I also offer a weekly newsletter subscription if you are interested in a periodic update of news and information and a summary of performance in the virtual portfolio that I manage. All it requires is your e-mail address. Join at Weekly Newsletter I look forward to having you as a subscriber.

By Michael C. Thomsett - Professional author specializing in consumer personal finance, risk management, and investing; author of more than 70 books.  





Receive Our Free Gifr


Make Money with Clickbank



video lesson ipads ipad pete

FOR THE FIRST TIME... I Am Going to Trade Live Online Daily and Email
my Trades to you, and give you my FOREX TRADE COPIER SOFTWARE.
Buy




Recommended Products




fap turbo flash forex forex trendy binary options trading signals

Next page: Stock Charts Google


Bookmark/Share This Page:

ADD TO DEL.ICIO.US ADD TO DIGG ADD TO FURL ADD TO NEWSVINE ADD TO NETSCAPE ADD TO REDDIT ADD TO STUMBLEUPON ADD TO TECHNORATI FAVORITES ADD TO SQUIDOO ADD TO WINDOWS LIVE ADD TO YAHOO MYWEB ADD TO ASK ADD TO GOOGLE ADD TO MAGNOLIA ADD TO NING ADD TO RAWSUGAR ADD TO SPURL ADD TO TAGTOOGA

  Bookmark and Share


Stock Chart News


houseplangallery.com

fouryoursucess.com

Receive Our Free Gifr