Friday, April 26, 2013

Support & Resistance in Stock Market

How Support & Resistance will help in Stock Market?

The price move in a series of perks and trough, and that the direction of those peaks and trough determined the trend of the market. Now give those peaks and trough their appropriate names as support and resistance.
           The trough, or reaction lows are called as support that indicate as a level or area on the chart under the market where buying interest is sufficiently strong to overcome selling pressure. Resistance is the opposite of support and represents a price level or area over the market where selling pressure overcomes buying pressure and a price advance is turned back.
           In a uptrend, the resistance levels represents pause in that uptrend and are usually exceeding at same point. In a downtrend support levels are not sufficient to stop the decline permanently but are able to check it at least temporarily. The concept of support and resistance is necessary for a full understanding of the concept of the trend.
           Each time a previous resistance peak is  being tested, the uptrend is in a especially critical phase, failure of exceed a previous peak in an uptrend, the ability of price to bounce off the previous support low in a downtrend..





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