STX Charts, page-666

The best way to look at support/resistance @Foibles is to try and see where the market became excited, or there were a lot of trades or evidence of accumulation or a breakdown.

In the following chart the area I've circled and labelled area 1, it is a breakdown area from the preceding high, it's an area where some sort of stop was put on the decline, usually by diminished supply which enabled the share to be accumulated, in this case very quietly on low volume ( so we know the big guys are here ). Area 1a confirms this level as a strong support level because once it does breakdown the decline is quite rapid.

So we pencil in around 42/45 as a big level to overcome on the way back 'cause that's where people got caught holding, or got caught selling and are waiting to get back in or a plethora of reasons dictated by emotion. So there you have it - you can't hide what the market does if you can read a chart and you now have a fair idea of how they are going to behave as time progresses.

Of interest as well is support - using the same approach we can see that area around 36/39 is an area of interest for possible support, notice I underline possible because you should never confuse support or resistance with a target price, they are vastly different.

Again of interest is the behaviour of what I like to call "the big guys" - the market makers, the pro's. I've highlighted the sucker bar of the 5th June. It's fascinating watching these guys in action, the leadup as they sell into the rising market days before then the initial push up on the 5th June and then the gotcha moment as they sell (look at the volume). Then slowly buy in again on the trip down until they have enough accumulated and we reach that support at 1a - which ultimately failed in this case. Wordy I know but helpful I hope.