How to Read Chart?

In the world of stock trading, the terms "resistance" and "support" are key concepts that traders rely on to make informed decisions.

The Transition: When Resistance Becomes Support

? Breaking Resistance: When a stock breaks above a resistance level, it’s often because of increased buying pressure. This could be triggered by positive news, strong earnings, or broader market trends. The breakout signifies that the market has re-evaluated the stock’s value and is willing to pay a higher price.

? Testing New Support: After breaking through the resistance, the stock may pull back to test this new level. If the old resistance now acts as support, it’s a strong signal that the market sentiment has shifted. Traders who missed the initial breakout might step in, confident that the price won’t fall below this new support level.

? Confirmation of Trend: When resistance successfully turns into support, it confirms the strength of the upward trend. This transition is a key moment for traders, as it often leads to further gains. It also reflects a psychological shift, where previous skeptics become believers in the stock’s potential.

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