The point we made in the preceding discussion is that the very fact that we observe stock prices near so-called resistance levels belies the assumption that the price can be a resistance level. If a stock is observed to sell at any price, then investors must believe that a fair rate of return can be earned if the stock is purchased at that price. It is logically impossible for a stock to have a resistance level and offer a fair rate of return at prices just below the resistance level. If we accept that prices are appropriate, we must reject any presumption concerning resistance levels.

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