Trading range break (support and resistance)

CFAI Vol 2 pg 33 says “A buy signal is generated when the price penetrates the resistance level, and a sell signal is generated when the price penetrates the support level.”

As far as my understanding goes, the resistance level is the level at which the investors believe the stock is overpriced.This should mean a sell signal will be generated right? The book says otherwise. Please clarify.

A simple explanation is like this: when a stock move above previous resistence, it means there are more demand than supply (i.e. positvie momentum), it means the stock will continue the upward movement. So you should buy once the stock breakout.

Thanks xinluo. It makes sense now.