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Technology Stocks : Newbridge Networks
NN 14.74-3.2%3:59 PM EST
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To: Brett Nelson who wrote (4139)4/18/1998 10:15:00 PM
From: Giraffe   of 18016
 
>>other words, think of resistance in terms of market value, not absolute price per se. The market is rejecting that this hypothetical stock's market value is worth more than $100. Whether that's 1 share @$100 or 2 shares @$50 is immaterial as long as your chart is adjusted for the new shares outstanding.<<

That's quite right.

And aside from the question of value - most TA's just look at the split-adjusted chart, draw a line across the resistance support points and say to themselves "better be careful when it nears that line!".

So you wind up with a bunch of people looking at the same price point on the chart and getting antsy if it looks weak when it hits there or enthusiastic if it breaks through with strength.
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