1) It's bounced there recently -- up or down.
2) It forms a clear pattern.
The pattern is either a double top/bottom or more powerfully - the symmetrical triple bottom -- which almost always ensures a big move.
The move is dictated by:
a) time between the touches
b) volume during the pattern
c) Market Signals
d) sector strength
for /es or /cl -- these broad patterns often resolve before turning points... always after extended moves.
The trend having been established... the market then proceeds to either run dramatically or create minor patterns -- pennants/flags/wedges
until it reaches a new resistance area. This too will often resolve through a double or triple top -- unless the area has been clearly touched before in which case there's no need.
Today's bottom in /tf was clearly marked by a triple bottom before a fast move and then triple top ended it... bounced again... and a higher triple top began a move down.
This bread and butter pattern should be the basis for ALL entries -- with add-ons after the intial direction goes the intended way.
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