Previous Day Close: King of Levels

When you use horizontal levels to understand the relative position of price, it is important to also recognize how each level represents the market. While some levels define ranges via concepts such as support and resistance, others are indicative of price acceptance and rejection and can signal the next phase for a stock’s price. Knowing the differences and their nuances can give you the extra edge when stocks that aren’t necessarily out of range yet may be ready to trend or transition.