Support and Resistance Technical Analysis & Support and Resistance Trading Signals

Support & Resistance is one of the vastly used concepts in indices trading. Most traders draw horizontal lines to show these areas.

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

In these levels stock price can either bounce off these zones or break through these zones.

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 stock price at which a majority of investors feel prices will move lower.

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

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

Technical Analysis & Generating Trade Signals

These levels are calculated a trendlines method.

Upwards Trading Trend

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

Up-wards Indices Trading Trend

Downward Trading Trend

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

Downward Trading Trend