ABSTRACT
This chapter shows many breakouts from well-defined Reversal and Consolidation Patterns and describes a short countermove back to the edge of the pattern and the checking of this move at that point is an example of Support or Resistance, as the case may be. Where people are buying against Major or Intermediate Support, or selling short against Major or Intermediate Resistance, people can allow a little more leeway for penetration. If the stock makes a small move in the right direction and returns to the Support or Resistance, prepare to get out if there is a definite penetration. If the stock should then advance to a new high, and once more decline on low volume, people may look for another buying point at about the level of the peak reached on the original breakout. Another advance may be followed by reaction to the second peak, each reaction carrying back to the level of the preceding high.
