Bulkowski's Torchmark (TMK) Quiz

If you can determine how far price is going to rise or fall, that’s worth big bucks. Price is about to rise. Where will it stall or reverse? Note: All slides in this quiz are on the weekly scale.

The blue lines show overhead resistance turning/stalling points. The red lines are support areas. I drew the lines from the peaks or valleys to the right of the green line, extending to the left. The green line marks the prior chart from the new one. Price after the last bar on the right continues moving up, bounded by round number resistance (25, 30, 35, and so on).

How often does price stop at a peak or valley? I conducted a test to answer this question and found the following (see table).

Prior peaks or valleys stop price movement about a quarter of the time.

Price at point A, after the upward breakout from a head-and-shoulders bottom (LS, Head, RS) reverses when it meets resistance setup by a prior peak at B. Point C finds resistance at the valley D. Please note that I changed the graph to illustrate these points.

Please do not adjust your set! This is the same picture flipped upside down. It illustrates downward breakout support and resistance. Point A finds support at valley B. C finds support at the prior peak D. When I conducted the support or resistance test, the above is what I looked for. Support can become resistance and resistance can become support.