Support and Resistance Stocks Technical Analysis and Support and Resistance Stocks Signals

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

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

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

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

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

Stocks 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 stocks prices will move lower.

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

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

Stock Technical Analysis and How to Generate Signals

These levels are calculated a stocks trend lines method.

Upward Stock Trading Trend

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

Upward Stocks Trading Trend

Downwards Stock Trading Trend

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

Downward Stocks Trading Trend