Support Become Resistance or Vice Versa
A support level, penetrated by a significant margin, becomes a resistance level and vice versa. Figure show the support and resistance level or Vice Versa. When a resistance level breaks then it becomes a strong support level and vice versa. Now we are moving to a practical example of our Market Forex.
In an uptrend, resistance levels that have been broken by a significant margin become support levels. Notice that once resistance at point three is exceeded, it provides support at point four. Previous peaks function as support on subsequent correction.
From the figure we can see that previous resistance peak become a support level. The price broke the resistance line and increased. After few days in came down and got support from the previous resistance level. Again the stock got support form that level and went up.
Again In figure showing declining price, on (which had been a previous support level under the market) has now become a resistance level over the market acting as a ceiling. It was mentioned earlier that the distance prices traveled away from support or resistance increased the significance of that support resistance. This is particularly true when support and resistance levels are penetrated and reverse roles.
you must have to read the other topics first :