Support and Resistance Zones

Although resistance and support are most often represented as single lines, they can also be shown on charts as zones. Typically, the lines are drawn between points of reaction high and low points. In some patterns, zones more accurately show the likely formation trend.

Because precise resistance and support levels are not always apparent, the zone approach allows you to map out the course of a trend without rigid compliance with rules. For example, if price breaks a trendline, does that mean the trend itself has ended? This can signal the beginning of a reversal formation, but not necessarily. Every price pattern and every form of confirmation sets up in its own way. So trend analysis has to be a flexible science ...

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