Support & Resistance Technical Analysis and Support & Resistance Trade Signals

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

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

Support & Resistance Indicator - Support & Resistance Levels Indicator Analysis

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

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

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

Price where the majority of traders believe that the 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/resistance area.

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