The useful definition of a level is not "a price where the chart bounced". It is a price at which a meaningful number of shares changed hands, leaving people with a position and a reason to act again at that price.
That definition does the work. It tells you why a level formed on 4M shares matters more than one formed on 40k. It tells you why levels decay: the holders eventually get out. And it tells you why a low float has fewer real levels than a chart full of squiggles suggests.
The levels worth marking, in order
| Level | Why it holds | Strength |
|---|---|---|
| Pre-market high / low | Everyone watching the name saw it. The most self-fulfilling level of the session. | High |
| Prior day high / low | Published, visible on every scanner, and it framed yesterday's decisions. | High |
| Opening range high / low (first 5m) | Sets the day's initial balance on maximum volume. | High |
| VWAP | The reference institutional and algorithmic flow measures against. | High, intraday |
| Session high / low (HOD / LOD) | Continuously updating. Breaks trigger stops and momentum entries. | High |
| Prior consolidation shelves | Real volume changed hands there. Trapped holders sell into recovery. | Medium |
| Round numbers ($5, $10) | Order clustering, and option strikes where chains exist. | Medium |
| Offering / warrant strike price | A published price at which supply is contractually available. | High, and knowable |
How levels behave, honestly
- 1.Levels are zones, not lines. On a $3 low float, treat a level as a band of a few cents, not a price. Stops placed at the exact number get taken.
- 2.The third test is weaker, not stronger. Every test consumes resting orders. The conventional teaching that repeated tests confirm a level has it backwards: repeated tests exhaust it.
- 3.Broken resistance becomes support only if volume confirms. A break on declining volume is a probe, and probes fail. This is where the volume module earns its place.
- 4.Levels decay across the session. A pre-market level is most potent at the open and largely irrelevant by 14:00, by which point VWAP and the session's own structure dominate.
Why the low float changes the arithmetic
A level is only as strong as the resting size behind it. On a 1.4M float that has already rotated twice, there may be a few thousand shares at the level and nothing behind it. That is why low floats slice through "strong" resistance and then gap five levels: the resistance was real, it was just thin. Size your expectations by float rotation, not by how convincing the line looks.
Done with this module?
Close it and the candle prints on your tape · stored in this browser