Strategy Central

[Mr Nasdaq]

Resistance, when captured, becomes Support (Buy Trigger)

A principle of Support & Resistance states, "Gathering Resistance, when captured by a rising price, becomes Gathering Support".

AAPL's 5-Minute Chart demonstrates that principle in action:

1) AAPL rose to Tuesday's area of "Gathering Resistance" ($70 on the nose) and poked at it for an hour between noon and 1:00pm (EST).

2) When AAPL finally broke through that line of Resistance, it was a warning to those holding short positions.

3) A second warning to those holding short positions came when AAPL, having captured Resistance at $70, pulled back to find Support there.

4) "Gathering Resistance" at $70 had been transformed into "Gathering Support" by its capture and "Gathering Support" is a Buy Trigger.



Tuesday's area of "Gathering Resistance" at $70 (on the nose) was composed of:

1) $70.00 - the early August peak

2) $70.00 - Triple-Top Breakout (from the Point & Figure Chart)