is a price area where declines have stopped several times, one where rises have stalled. Think of zones, not exact lines: prices rarely turn to the cent. After a , old resistance can become support – this is called a .
Zone instead of line
Place the zone over the turning points, not through a single price. A line exactly at 120 misses highs at 119.40 and 119.80; a zone from 119.40 to 120.30 covers them all. The more often a zone has been touched, the more attention it gets – that is not a promise.
Role reversal after the breakout
If the price closes above resistance, it sometimes runs back to the old zone once more. If the zone then holds from above, it acts as support. If the price falls clearly below it again, it was a false breakout.
How this relates to our rule
The of our rule is also a zone, but calculated from Fibonacci ratios, not from earlier turning points. If both overlap, that is something to watch. This combination has not been tested.