Support & Resistance

Using trend lines to create support & resistance is a straight forward way to establish a buy or sell target. When the prices broke a key resistance level, it might continue in uptrend. When the prices broke a key support level, it might continue in downtrend. Candlestick chart is the best way to represent this, because it clearly displays the lowest close and highest close of each day.

Let’s look at some examples below:

Uptrend – When Stock Prices Are Moving Within The Range Of Support/Resistance Level

 Chart courtesy of StockCharts.com

Breakout -When Stock Prices Break Key Support/Resistance Level

Chart courtesy of StockCharts.com

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