What Is the Last Point of Support?
After a Sign of Strength, price usually pulls back. If the pullback stops above previous support on lower volume and narrow spreads, it marks the Last Point of Support. It shows that sellers no longer have the strength to push price back into the range.
Why Traders Like It
Several LPS pullbacks can occur as price steps up out of the range.
- A logical stop-loss just below the pullback low.
- Reduced risk because evidence of strength has already appeared.
- Clear targets at the range high and beyond.
Risks
If the pullback runs back into the range on rising volume, the move was probably a trap. Respect your stop and reassess the structure.