On the mechanism of support/resistance lines (with charts included)

Hello traders,

I've got an interesting and useful observation on support'resistance lines, and need some your advice to understand this thing completely. Here are two charts:

I have noticed, that a line, first drawn as support, later works as resistance level and helps to figure out the target, and vice versa. This scenario is seen on different timeframes, e.g. I've taken these screenshots from tick charts during the previous hour - just to show you, that it's a common, everyday thing.

I guess there is already a correctly worded anwer to my question, and I'm sure I'm not the only one here who uses such tool. Maybe someone can give me a hint for some further information on this topic, considering in particular why this instrument works? Thanks :)

Views: 137

Comment by DaPipCheese on August 1, 2012 at 2:54pm
Take a look at the research done by Tim Morge concerning Median Lines at MarketGeometry.com

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