The extremes of the session traded outside regular hours, often used as the first reference levels of the day.
In futures and in equities with active extended hours, price keeps trading while the main session is closed, usually on thinner volume and wider spreads. The high and low of that period frame the day's opening context.
A regular session that opens inside the overnight range and stays there is in balance; one that opens outside it or breaks it early is more likely to trend. Traders use the levels as first targets and as boundaries for the opening-range.
Because overnight liquidity is thin, these extremes are often set by very little actual trading, which makes them easy to break. Treat them as reference lines rather than as strong support or resistance.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.Support, resistance and the flip. Support is a price where buyers keep stepping in and the fall stops; resistance is a price where sellers keep stepping in and the rise stops. Once price closes above an old ceiling, that same level often acts as the new floor.
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