Support and Resistance Reversals happen all the time on all time frames and are very simple.
Previous broken support becomes resistance and previous broken resistance becomes support.
Here is a look at few examples from last few days alone.
– SP500 emini futures Spike high from overnight session on Thursday becoming support and low of the day on Friday. Also note few smaller s/r reversals in previous market sessions.
– ES emini support from one week, becoming resistance next week:
– Even after government intervention in the Franc earlier this week, support and resistance reversals still work:
– Euro stair stepping down and then up s/r reversal levels the past 3 days:
Support and resistance reversals are very easy to spot, happen in all markets on all time frames, when combined with other set ups are very powerful.
Support and resistance reversals are also valid with sloping trendlines, here is a great example during this recent rally of previous support becoming resistance on the SP500 emini
Only problem with diagonal support and resistance reversals is that price could “ride” up/down previous s/r line before reversing, thus I prefer horizontal support and resistance reversals since entries and stops are more clear.