ABSTRACT
We know that after many breakouts from well-defined Reversal and Consolidation Patterns, we get a short countermove back to the edge of the pattern, and that the checking of this move at that point is an example of Support or Resistance, as the case may be. Also, we should be familiar by now with the tendency of stocks to move up or down in a series of zigzag steps. If the move is upward, the reaction after each advance tends to stop at the level of the preceding peak. If the move is downward, the rally after each decline tends to stop at the level of the preceding bottom. This is again a matter of Support and Resistance, and provides the basis for buying on reactions or selling on rallies.
