The Flip
One of the most revealing patterns in resistance and support is the flip. This occurs when previous resistance becomes a new support level, or when previous support forms as new resistance.
In these occurrences, it often becomes clear which direction a trend is taking. It is also true that after the flip, the newly established resistance or support level tends to be exceptionally reliable—not always, but often. To draw this conclusion, you should rely not only on price action, but also on confirmation.
The exceptional aspect of the flip is that it signals a transfer from demand to supply (on the downside) or from supply to demand (on the upside). This is a strong transfer, which translates to strong newly established price limits on ...
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