Slothrop Posted December 6, 2002 Report Share Posted December 6, 2002 We talked about this in IDS today. I'm interested in whether others believe that this apparent truism of technical anal-Isis is valid. On the hourly and daily COMP chart, up until yesterday, you could see an uptrending line of higher lows. Then, the index broke through on the downside. Today, we had a classic example of previous support becoming new resistance...when, midday, the COMP rallied back to the uptrending line connecting the previous higher lows...and it couldn't punch through. The rally failed at that point and headed further south. It doesn't always happen this way, but it happens often enough to be tradeable, IMHO. Link to comment Share on other sites More sharing options...
Rockhead Posted December 9, 2002 Report Share Posted December 9, 2002 Sloth.... Attached is an annotated chart which speaks to your comment. Points "A" and "B" represent the first 60 minute trendline. Points "B" and "C" represent the second 60 minute trendline. Point"D" on 12/5/02 at about 10:30 AM is the reveral point to which you speak. Some, I believe, call such a reversal "The Kiss of Death". Meaning that the price dropped through earlier supporting trednline (B-C trendline) and now rises back to that trendline level from underneath, touches it (Point D), and then reverses back down. I find such reversals quite common and is one reason I do not always delete trendlines until they become "quite" old. But remember there was the A-B trendline still out there.......which became support for the COMPX right on schedule at Point "E". Bottom line, the more times a trendline is hit, the stronger it becomes. The A-B-E is now stronger than the C-D in my opinion. Link to comment Share on other sites More sharing options...
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