The concept of S/R FLIP (Support/Resistance Flip) in technical analysis refers to the turning of price movements from support to resistance levels or vice versa. This term represents situations where prices move from a support level to a resistance level or from a resistance level to a support level.
For example, an asset price may move within a specific resistance level for a long period of time and fail to break above it. However, if the price continues to rise after a certain period of time, breaking the resistance level, this level has now become a support level. This is called an S/R FLIP.
Similarly, an asset price may move within a specific support level for a long period of time and fail to drop below it. However, if the price continues to fall after a certain period of time, breaking the support level, this level has now become a resistance level. This is also called an S/R FLIP.
S/R FLIP is typically observed in horizontal or sloping trends and is confirmed by volume. That is, when prices are moving at a certain level, if the volume is high, the likelihood of an S/R FLIP occurring is higher.
S/R FLIP is used by investors and traders to determine support and resistance levels and to predict the direction of price movements. Therefore, the concept of S/R FLIP is quite important in technical analysis.
The following chart shows an example of an S/R FLIP.