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THREETREND RESEARCH

9th Nov · SEBI-Registered Analyst

When a stock price breaks out above a strong resistance level — a point where it previously faced selling pressure — that same level often becomes a new support zone after the breakout. This happens because traders who missed buying earlier now see the breakout as confirmation of strength and look to enter near that level on pullbacks, while previous sellers may also re-enter as buyers. As a result, demand increases around the breakout point, preventing prices from falling below it easily. This concept is known as “breakout point becoming support” and it reflects the shift in market psychology from selling pressure to buying interest.

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