Support and Resistance Analysis & Support and Resistance Trading Signals

Support & Resistance is one of the widely used concepts in stock trading. Most traders plot horizontal lines to show these areas.

There is also an indicator used to draw these levels automatically and indicate the resistance & support levels.

When it comes to these levels price can either bounce off these regions or break out through these regions.

If a resistance level is broken price will move higher and the resistance level will turn to a support.

If a support level is broken price will move lower and this level will turn to a resistance.

Price where the majority of investors believe that prices will move higher, while resistance levels indicate the price at which a majority of investors feel prices will move lower.

Once price has broken through a support or a resistance then it is likely that the price will continue to move in that specific direction until such a time when it gets to the next support or resistance zone.

The more often a support or resistance level is tested or is touched by the price and bounces, the more major that particular level becomes.

Trading Analysis & Generating Signals

These levels are calculated a trend lines method.

Upwards Trend

In an upwards trend the resistance & support will generally head upward

Upward Trend

Downward Trend

In a downward trend the resistance and support will generally head downwards

Downwards Trend