Here’s Why You Should Watch Previous Resistance Levels
Once a resistance level
is broken, it becomes a new support level. As you know, after a
breakout, a stock often comes back to test its previous resistance level.
Needless to say, if this test is successful, we can buy the stock especially in case
we have missed the breakout.
11:07:38
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Setup Alert
Apple Computer (AAPL)
is testing a former resistance line. If successful, this level will become a new
support level. Some traders think this is a good level for a buy-entry. AAPL is
down 50 cents at 34.16.
We still have more than 2 hours of trading left, but so far, AAPL is holding
above its previous resistance level. Look at the 60-minute chart below. AAPL is
attempting to rally out of a pullback.
Let’s see if this level holds.
T.Kamada