Support and Resistance Flipping

Support and resistance flipping is a phenomenon where a former resistance level becomes a new support level after a breakout, or vice versa. This transition demonstrates the change in market sentiment and the psychological importance of the level.

In the context of double tops and bottoms, the neckline often undergoes this flip. Once the price breaks through the neckline, it frequently retests that level from the other side, confirming its new role.

This retest is a high-probability entry point for many traders. It reflects the memory of the market, as participants acknowledge the new price reality.

In derivatives, this flip can create significant support or resistance for future price action. Understanding this concept helps traders anticipate potential price pivots and manage their positions more effectively.

It is a core principle of technical analysis and price discovery.