Support & Resistance

Support

(No 1 on chart)

This is where the price is struggling to go below, there are more buyers than sellers that makes it “Bullish”.

We use levels of support for a buy opportunity or to cut losses if a stock goes below. If a stock moves below the support line it means it will most probably move further down to the next support.

Resistance

(No 2 on chart)

This is where the price of the stock is struggling to move above, there are more sellers than buyers, this makes it “Bearish”.

Use resistance levels as a sell opportunity or cut losses on a short position. Shorting is when you make profit from stocks moving down.

Change in Support & Resistance

(No 3-4 on chart)

If either is broken this can create a new level of support or resistance.

This is a good example of what it will look like.

Dictionary

• Bullish – The stock price is going up, getting more expensive due to more buyers than sellers.

• Bearish – The stock is moving down, price decreases due to more sellers than buyers.

• Supplying – Sellers market

• Demand – Buyers market