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Strategies & Market Trends : P&S and STO Death Blow's
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To: Dnorman who wrote (6556)9/6/2002 12:12:55 PM
From: Cola Can   of 30712
 
I have a resistance and support question. I have heard
when you go through resistance it becomes support.

There are some things that need to be looked at, in
determining when resistance becomes support:

1. How long it traded at the resistance level before
breaking through it. The more it traded at the level, the
stronger the support level will be. It is more an issue of
volume traded rather than time, but an extended time would
produce a lot of volume.

2. The amount of volume it took to break through the
resistance. If it was weak volume, relative to its norm,
then there is a chance the support will be weak. Low volume
could mean not all the sellers have been taken out.

What you want to achieve is determining how strong a base
was established at a certian level. A trendline will act
like a support/resistance line also. The rules are not
written in stone and in today's manipulated market, TA rules
have a greater chance of failing. But most of the time
the rules hold.
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