Price ActionIntermediate

Retest

A retest is when the price returns to a level it has just broken — for example falling back to old resistance — before deciding whether to continue.

Price breaks through a level, and then — often — comes back to touch it. That return trip is the retest. Whether the level now holds from the other side tells you a lot about whether the Breakout was real.

Category
Price Action
Reading time
4 min
Also called
Break and retest, Throwback, Pullback to the level
Updated

A retest in plain words

Once a level is broken, its role tends to flip: broken support becomes resistance and broken resistance becomes support.1

A retest is the moment price comes back to that flipped level, for example recovering to just below old support that is now expected to act as resistance.1

If the level fails again, the breakout may have been false.2 See Support and Resistance.

How to read a retest, step by step

  1. Mark the level

    Identify a clear level or zone; many traders use zones rather than exact lines.2

  2. Wait for a real break

    Do not treat a tiny poke through as a break.2

  3. Expect the role to flip

    Broken resistance should now act as support, and broken support as resistance.1

  4. Watch the return

    Watch price come back to the level, as when it recovers to just below old support.1

  5. Look for a reaction

    A hold on the retest supports the breakout; a move back through it suggests a false breakout.2

  6. Set invalidation

    Place a Stop Loss beyond the level, since a broken support can become resistance.2

Worked examples

Example 1 — Resistance becomes support

Risk defined at $1/share

Resistance at $50 breaks; price runs to $54, then dips back to $50.20 and bounces.

Example 1 — Resistance becomes support — calculation
Entry on retest$50.20
Stop below level$49.20
Risk per share$1.00

A broken resistance becomes support, so the dip to $50 is the retest that tests that flip.1

Example 2 — Support becomes resistance

Level held as resistance

Support at $30 breaks; price falls to $27, then rallies to $29.90 and stalls.

Example 2 — Support becomes resistance — calculation
Retest high$29.90
Old support$30.00

Once price breaks below support, that level can turn into resistance.2 Here price recovered to just below it, as in a classic retest.1

Example 3 — Failed retest

−$1.10 per share

Price breaks $80 resistance to $81, returns to $80, then closes at $77.

Example 3 — Failed retest — calculation
Planned entry$80.10
Stop$79.00
Loss per share$1.10

The move back below the level made it a false breakout, and the stop capped the loss.2

Retest vs related ideas

AspectWhat happensWhat it tells you
RetestPrice returns to a broken levelWhether the role flip holds
BreakoutPrice moves through a levelPossible new move
False breakoutPrice breaks then returns insideBreak failed
PullbackPrice dips within a trendMay or may not touch a level

How traders use retests

  • Better entries

    Entering after a Breakout at the retested level rather than chasing.

  • Tighter stops

    Placing stops just beyond the flipped level for a clear Risk-to-Reward Ratio.

  • Filtering false breaks

    Waiting to see if the level holds.

  • Adding to positions

    Scaling in when the retest holds.

Advantages and disadvantages

Advantages

  • Gives a clear level for entry and stop.
  • Often offers a better price than chasing the break.
  • Helps filter some false breakouts.
  • Works on any timeframe.

Disadvantages

  • Many strong moves never retest.
  • The level may be breached slightly, triggering stops.
  • Deciding what counts as a touch is subjective.
  • Waiting can mean missing the trade.

Going deeper

Read as far as you need. Each level builds on the one before it.

Role reversal

Beginner

A broken level changes role: support becomes resistance and resistance becomes support.1

Zones, not lines

Intermediate

Because closing slightly beyond a level may not be a real break, many traders draw zones.2 Treat the retest area as a band.

When retests fail

Advanced

Levels that have been tested several times may be remembered by market participants, but a retest can still fail and turn into a false breakout.2 Size positions so a failed retest is an affordable loss.

Common mistakes

  1. Buying the exact line

    Expecting price to touch a precise number.

  2. Stops too tight

    Placing the stop right on the level.

  3. Always waiting

    Assuming every breakout will retest.

  4. Ignoring context

    Taking a retest against the higher-timeframe trend.

Check your understanding

Test yourself before moving on. Each answer comes with an explanation.

Q1Resistance at $40 breaks. Price later returns to $40. What should the level act as if the breakout is valid?
Q2Entry $40.20, stop $39.70, target $41.70. What is the reward-to-risk?

Key points to remember

  1. A retest is a return to a just-broken level.
  2. Broken support becomes resistance and vice versa.
  3. Use zones, not exact lines.
  4. A failed retest can signal a false breakout.
  5. Always place a stop beyond the level.

Frequently asked questions

Does every breakout retest?

No. Strong moves often keep going without returning.

How close counts as a retest?

There is no fixed rule; most traders use a small zone around the level.

What if the retest fails?

It may be a false breakout; exit at your stop.

Further learning

Sources

This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.

  1. CMC Markets. Support and Resistance (opens in a new tab) Checked .
  2. StockCharts ChartSchool. Support & Resistance (opens in a new tab) Checked .

Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.