Line #3 is reasonable support; then eventually it is not, meaning price could break lower. I would rate that as normal in a healthy market.
Line #2 is also reasonable, but with #3 as reasonable support then #2 would be reasonable resistance.
Now I could also accept #1 as reasonable resistance if price broke above #2, which it did, but price went much further than that. I have a lot of trouble accepting #1 as being a new support level in what I think is a very long bull cycle. So I hesitate making large trades here until price drops back below #1, which returns it to being resistance.
If the market does drop back below #1, then I think it would not be unreasonable to expect price to test #2 as a support level, then via continued momentum (spelled fear) it could retest #3 as final support. I would consider that level of correction as being healthy in a Bull market, as it puts off the dreaded Bear market, and the Bull market would have a much better chance of continuing through the year.
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