Bulkowski's Tredegar (TG) Trading Quiz

Price is about to drop on the weekly chart shown above, but it won't drop in a straight-line run.

Question: Where are the support and resistance zones, that is, at what price will the stock turn or pause?

The vertical green line is where the prior chart ends. Blue lines are support zones and red lines are overhead resistance. I show them by connecting the peaks and valleys to the right of the green line and extending them to the left.

I drew circles (not all) where price nears the red or blue lines as peaks or valleys, just to show the SAR (support and resistance) regions. SAR often is not a single price but a range of prices. Notice how close together the top and bottom two blue lines are (two at 16 and two near 12).

Here's another chart. Price is about to rise.

Question: Where will it pause? Mark overhead resistance and underlying support areas.

Again, the green line marks the old chart from the new. I added two chart patterns to the mix. Sometimes chart patterns will act as support or resistance locations. Blue lines align with minor lows to the right of the green line, red lines align with peaks. Notice how one resistance zone becomes a support zone (the closeness of the two lines), such as lines at 55 and 52, 34 and 33.

The descending triangle cuts through price on the top at A, so I would not call it a triangle. Rather, I consider it a rectangle bottom when joined with B.