Confirming a retest of a broken level

The rectangle is useful for marking retest zones after a breakout. Anchor the rectangle by placing one corner on a key support level and the opposing corner on a key resistance level. The rectangle's boundaries now visually represent the support and resistance zones.

After the price breaks above resistance, that level often becomes the new support. A bounce off this zone is called a retest and confirms the uptrend.

Conversely, when the price breaks below support, that level can become the new resistance. A rejection from this zone confirms the downtrend.

A failed retest, where the price moves back across the level, can signal a potential bull or bear trap.