#MarketPullback Case Study: Pull Back in a Bullish Market

Let’s say you identify an uptrend on a chart and the price has broken a major resistance level. After the breakout, the price moves back towards the previously broken resistance level. This could be a sign of a bullish pull back, indicating that the price is testing the resistance level as a new support level before continuing its uptrend. You could then consider entering a long trade when the price bounces off the support level.

Case Study: Pull Back in a Bearish Market

In a bearish market, you might spot a downtrend and a major support level that has been broken. After the breakout, the price moves back towards the previously broken support level. This could be a sign of a bearish pull back, indicating that the price is testing the support level as a new resistance level before continuing its downtrend. You might then consider taking a short position when price bounces off the resistance level.