One thing I always look at to start formulating an opinion about a certain level, such as a couple of highs or lows, is whether or not, when price breaks above or below these points, does it come back for a test of the highs or lows in a few days or weeks?

If price comes back for a test of the breakout before it runs further in the breakout direction and then comes back to the breakout area sometime later, like weeks or months, my first inclination is to think the party is over for that movement because it already "tested" the breakout point once. Once a big run occurs after a successful break, test, and run and then comes back down from that runs high...back down to the breakout points...its like the market has washed out the imbalance that cause the run and things are returning to normalcy.

If, on the other hand, it breaks a series of highs or lows and does not, within a few days or weeks or even months, come back for a test of the range or series of tops or bottoms but keeps running for a time and then comes back to test the breakout point...I start to consider that to be the test of the break out with run to follow. Making it a good place to buy or sell.

All that based on the observation that price will, a great percentage of the time, come back for a test of the breaking of any line, whether it be a horizontal line or a trendline. Sometimes you'll miss a run waiting on the test of a breakout...but not often and if you wait for the test and a run ensues...it's usually a decent sustained run. A run that doesn't beat back and forth, chopping it's way up or down threatening to catch your stops and basically making you pee your pants. LOL