Support and Resistance Stocks Analysis & Support and Resistance Signals

Support and 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 & indicate the resistance & support levels.

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

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 prices will continue to move in that particular direction until such a time when the price gets to the next support or resistance level.

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.

Stock Technical Analysis & How to Generate Signals

These levels are calculated a trendlines method.

Upward Trend

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

Upward Trend

Downward Trend

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

Downward Trend