Descending Resistance-Support Level

A descending resistance level emerged with at least two lower highs which points towards the loss in bullish momentum which suggests that a longer-term downtrend may be developing. In addition is points towards limited upside risk as long as the descending resistance level is not violated. A descending support level requires two lower lows and is often the result of a breakout above a descending resistance level which turned it into a weak support level.

A breakdown below a descending resistance level is not as crucial to price action as a breakout above a descending resistance level; a confirmation of a breakout above a descending resistance level with a rise in volume can suggest a trend reversal.

Back to List  »