We are going to talk about support turning into resistance. It could actually be the exact same thing as resistance turning into support. But my example today is support, which is usually happens when you are coming down and it’s kind of like a floor being hit over and over and over again. And then the support.
Let me grab now and then the support turns breaks out and the pivots start to retrace back to the support area and they start to bounce off of this. So it turns into a resistance area. So.
Importance of what happens here. The good way to explain it is this. This isn’t necessarily a strong area support. This is obviously become a relatively strong area until it showed me that it totally broke through and this was a great breakout.
OK, now when it starts to bounce off of here, you want to be cognizant that the market is returning back to this exact same area and you have to simply sit out and wait until the market breaks, either to go here or as you can see here, there is a little support area formed as well and you want to see it break out.
So this particular area right here when it started to bounce up and down into the support, which now is the resistance, it’s a big indecision area. And when you have indecision areas, this could be killers, killers. For day traders, because you never want to speculate what the market, quote unquote, might do.
You need to sit out and wait to see what happens. And this is exactly what is happening right here. This is a huge decision area. And your best bet is to simply sit and wait.