When a breakout is only a pierce
How we teach the difference between a brief spike beyond resistance and a structural break worth waiting to retest.
In class we print the same ASX daily chart twice. On the first copy, students circle every wick that crosses the marked ceiling. On the second, they may only circle closes that hold beyond the level for a full session. The first sheet fills with noise; the second usually holds one or two candidates.
A pierce is useful information — it shows where resting orders may sit — but it is not yet a breakout in our curriculum. We ask for a close beyond the boundary, then evidence that price can remain outside the prior range. Only then does the retest conversation begin.
Homework after this lesson is simple: take three symbols from your watchlist, mark the current range, and write whether the latest excursion was a pierce or a candidate break. Bring the sheets to the next session; we will disagree in pencil, not in slogans.