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A throwback is a counter trend move that occurs after a resistance or support break. A bullish throwback evolves after a resistance break as a pullback to broken resistance, which turns into support. A bearish throwback forms after a support break as an oversold bounce back to broken support, which turns into resistance.
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The first example shows Autodesk (ADSK) with a bullish throwback after a resistance break. Notice how the stock broke resistance with a high volume surge. Broken resistance around 35 then turned into support and the stock declined below 36 in early March. After this throwback, the rally continued with another high volume breakout.
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The second example shows Allegheny Technologies (ATI) breaking support in February and broken support turning into resistance in March. The throwback bounce failed around 44 as the Stochastic Oscillator peaked below 80 and moved below its signal line.
