Role Reversal: When Support Becomes Resistance

Role reversal refers to the commonly discussed tendency for a broken support zone to subsequently act as a resistance zone if price later returns to that level from below, and conversely, for a broken resistance zone to subsequently act as a support zone if price later returns to that level from above.

One commonly discussed explanation for this tendency relates to market participant behaviour: those who previously bought near a support level that has since broken down may look to exit their position around breakeven if price returns to that level, creating selling pressure that turns the former support into resistance. Similar reasoning is applied in reverse for a broken resistance level becoming support. This is a commonly discussed rationale, not a confirmed, universally agreed-upon mechanism.

Role reversal is closely related to the concept of a retest, which will be covered in more depth in the Breakouts, Retests and False Breakouts lesson later in this group — where price breaks through a level and then returns to test it from the other side, providing an opportunity to observe whether the role reversal tendency holds in that specific instance.