The idea that once a level breaks, it tends to reverse roles: broken support acts as resistance, and broken resistance acts as support.
The usual explanation is behavioural. Traders who bought at a level that then failed are underwater and want out at breakeven, creating supply when price returns. Traders who sold there feel vindicated and add. Both push in the same direction on the retest.
In practice this makes broken levels natural places to look for continuation entries, and it is why so many systems wait for a pullback to a broken level rather than chasing the break itself.
It fails often enough to need a stop. In strong trends price frequently blows through old levels without pausing, and in choppy markets it oscillates across them repeatedly. The principle describes a tendency worth knowing, not a rule you can lean your account on.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Breakout and retest. Price stalls under the same level several times, pushes above it, then drops back to touch it from above before carrying on. That touch is the retest, where the old ceiling is tried as a floor. A break that falls straight back under it is a false breakout.Support, resistance and the flip. Support is a price where buyers keep stepping in and the fall stops; resistance is a price where sellers keep stepping in and the rise stops. Once price closes above an old ceiling, that same level often acts as the new floor.
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