Methods to Establish Support and Resistance in trading stock market ?
Methods to Establish Support and Resistance?
Support and resistance share enough common characteristics to effectively be mirror images of each other.
Highs and Lows
Support can be established with the previous reaction lows, while resistance can be established by using the previous reaction highs.
The above chart for Halliburton (HAL) shows a large trading range between Dec-99 and Mar-00. Support was established with the October low around 31. In December, the stock returned to support in the mid-thirties and formed a low around 33. Finally, in February, the stock again returned to the support scene and formed a low around 32 1/2.
After each bounce off support, the stock traded all the way up to resistance. Resistance was first established by the September support break at 42.5. After a support level is broken, it can turn into a resistance level. From the October lows, the stock advanced to the new support-turned-resistance level around 42.5. When the stock failed to advance past 42.5, the resistance level was confirmed. The stock subsequently traded up to 42.5 two more times after that and failed to surpass resistance both times.
trading,trading bot,trading live,live trading,trading guide,trading robot,binary trading,daytrading tips,live daytrading,live day trading,day trading live,daytrading advice,binary trading bot,live stock trading,trade ideas,canadian,tradertvlive,binary trading robot,live options trading,options trading live,tradertv.live,binary options trading,risk management trading,traders reality,day trading for beginners,trade ideas live,nifty prediction,bitcoin
Comments
Post a Comment