The opening price of the day opened below the low point of the previous day. When the price rebounded to the previous day's lowest point (at the circled position), it could not form an effective upward breakout. We can then enter a short position with the previous day's lowest point as the resistance level.
This type of trade is trend-following and has a relatively higher probability of success. In fact, whether the price opens above the previous day's highest point and is supported when pulling back to that level, or the price opens below the previous day's lowest point and is blocked during a rebound, it essentially reflects an action of filling a gap up or down on the candlestick chart.
