How the pattern unfolds
The setup
Stock A trends up toward a level near 113 that has acted as resistance.
What triggers it
Price breaks above 113, then pulls back to retest it. Instead of falling back through, the level holds as support and price resumes higher.
What it means — and does not
Old resistance becoming support on a retest is the structure traders call a confirmed breakout. It is descriptive. A retest can also fail and break back below the level.
- Price / index level
- Volume
- Old resistance / new support · 113
Price breaks 113 (day 7), retests it (day 10) and holds, then resumes higher.
Show the underlying data
| Day | Price / index level | Volume |
|---|---|---|
| 1 | 100 | 1 |
| 2 | 103 | 1.1 |
| 3 | 106 | 1.2 |
| 4 | 109 | 1.2 |
| 5 | 112 | 1.4 |
| 6 | 115 | 1.6 |
| 7 | 118 | 1.8 |
| 8 | 116 | 1.3 |
| 9 | 114 | 1.2 |
| 10 | 113 | 1.3 |
| 11 | 116 | 1.5 |
| 12 | 120 | 1.6 |
| 13 | 124 | 1.5 |
What this does not establish
The pattern is invalidated if the retest fails and price closes back below 113. Old resistance did not become support, and that is the whole claim being made. The low of the retest is conventionally treated as the invalidation level, and a stop-loss is anchored below it. A retest that holds intraday but closes through is generally read as a failure, not a hold.
Confirmation checklist
4Did price break the level decisively before the retest?
Did the retest hold the level as support, or break back below it?
Was the resumption on supportive volume?
Remember: retests can fail. This is an explanation, not a signal.
Common mistakes reading it
2Assuming every pullback to a broken level will hold. Some break back through.
Ignoring whether the original breakout was decisive in the first place.
Old resistance holds as support on a retest. What has actually been confirmed?
- That there was demand at the level on this occasion
- That the level has become permanent and will not break back through again
- That the trend continues for as long as the level keeps on holding
Show the answer
A. That there was demand at the level on this occasion
A held retest is evidence about one visit to the level. Retests fail and levels break back through — treating a single successful retest as a permanent property of the chart is the exact error the failed-break pages in this track exist to inoculate against.
Frequently asked
3Why does old resistance become support?
Once a level is broken, participants who watched it may treat it as a reference from the other side. On a retest it can hold as support. Often it does, and sometimes price breaks straight back through it.
Does a successful retest confirm a breakout?
Watchers often read a held retest as confirmation, but a retest can also fail. It is one input, not a certainty.
Is this a buy setup?
No. LearnNifty explains the structure for learning and provides no trade instructions.