Support and Resistance Stock Indices Technical Analysis and Support & Resistance Stock Indices Signals

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

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

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

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

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

Indices 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 stock index prices will move lower.

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

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

Indices Technical Analysis & How to Generate Signals

These levels are calculated a stock indices trend lines method.

Upwards Indices Trading Trend

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

Upwards Indices Trading Trend

Downwards Stock Indices Trading Trend

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

Downwards Indices Trading Trend