Stock EducationLearn more about how to pick and select stocks, and stock analysis.
» Stock Profit/Loss Calculator
Find out exactly how much you'll make (or lose) with our stock calculator!
Opportunity Knocks
Opportunities can be fleeting. When you need an
immediate cash infusion to make that deal happen,
a cash advance can be the answer. Online convenience is only a click away.
Another basic principle of trading / investing is support and resistance. These are prices where demand and supply meet, i.e...
When the stock's price is prevented from rising further, this means that the buying force is checked by the selling force. At that price, there are more sellers than buyers. (Resistance)
When the stock's price is prevented from dropping further, this means that the selling force is checked by the buying force. At that price, there are more buyers than sellers. (Resistance)
Of course, resistance and support levels are not definite as you can see from charts. It's common to see stocks breaking up through resistance and breaking down through support.
However, this doesn't mean that you shouldn't be concerned with them. For example, looking at the attached chart, Biosensors has a strong resistance at $0.99. This can be determined because of the stock has bounced back from $0.99 multiple times (R1, R2, R3).
Therefore, if Biosensors' stock price were to rise to its resistance of $0.99, you shouldn't be considering buying it UNTIL it shows buying strength that allows it to break through the resistance at $0.99 convincingly (R4). We know that there's a convincing breakthrough when we see the price rise above $0.99 with increased volume, as can be seen at point R4.
From the chart, you can see that support and resistance are formed when the price has touched that price level and bounced off. Stronger support and resistance levels are formed at previous highs / lows. For example, take a look at support: S1, S2, S3 and resistance: R1, R2, R3. You know that these are strong levels because they are all formed at previous lows (for support) and previous highs (for resistance).
In between there are still intermediate support and resistance levels, but these are much weaker and serve more for short-term trading. The dashed orange line in the middle of the chart shows an example of an intermediate support/resistance level.
Support and resistance become self fulfilling prophecies as many traders and investors monitor these important price levels and buy or sell based on the action of the stock's price as it reaches support and resistance.
The Following 5 Users Say Thank You to blitzksg For This Useful Post:
thanks a lot
i learn something new again...
i thought supporting line was having a lot of candlestick forming at a line.... like cenersave... support at 0.18... is this support a weak support?
yup..your A B and C look reasonable, but can't say C is much stronger than B.
B and C are both pretty strong support areas. if you look at the chart, there are times when the price hits 0.18, but bounces back, or simply cnanot break down.
C is strong too, because it's like the last line of defence...everytime the price reaches C, it rebounds, so we can that it's a good psychological price that buyers support the stock at
ohhhhhhh okie okie
i understand liao.... with a lot of candlestick forming at the small range of price also a support line but not as strong as the last line... if it breaks means the best price to enter maybe the last supporting line... but then again, if it break then the low is deep deep down like gem tv
haahaa
Another basic principle of trading / investing is support and resistance. These are prices where demand and supply meet, i.e...
When the stock's price is prevented from rising further, this means that the buying force is checked by the selling force. At that price, there are more sellers than buyers. (Resistance)
When the stock's price is prevented from dropping further, this means that the selling force is checked by the buying force. At that price, there are more buyers than sellers. (Resistance)
Of course, resistance and support levels are not definite as you can see from charts. It's common to see stocks breaking up through resistance and breaking down through support.
However, this doesn't mean that you shouldn't be concerned with them. For example, looking at the attached chart, Biosensors has a strong resistance at $0.99. This can be determined because of the stock has bounced back from $0.99 multiple times (R1, R2, R3).
Therefore, if Biosensors' stock price were to rise to its resistance of $0.99, you shouldn't be considering buying it UNTIL it shows buying strength that allows it to break through the resistance at $0.99 convincingly (R4). We know that there's a convincing breakthrough when we see the price rise above $0.99 with increased volume, as can be seen at point R4.
From the chart, you can see that support and resistance are formed when the price has touched that price level and bounced off. Stronger support and resistance levels are formed at previous highs / lows. For example, take a look at support: S1, S2, S3 and resistance: R1, R2, R3. You know that these are strong levels because they are all formed at previous lows (for support) and previous highs (for resistance).
In between there are still intermediate support and resistance levels, but these are much weaker and serve more for short-term trading. The dashed orange line in the middle of the chart shows an example of an intermediate support/resistance level.
Support and resistance become self fulfilling prophecies as many traders and investors monitor these important price levels and buy or sell based on the action of the stock's price as it reaches support and resistance.
Hi, I am new to investing and trying to learn technical analysis. Just wondering what software did you use to draw the attached chart? Is it free or need to be purchased?
SingaporeStocks.com.sg provides forums for discussion where investors and traders can share information with each other and in so doing become better investors. The information and data made available on this Website including facts, views, advice, analyses, opinions and recommendations of individuals and organisations are for general information purposes only. Read our Terms & Conditions and General Disclaimer & Warning on using the website. Singapore Web Hosting by Vodien Internet Solutions.
Communitys
Blogs
Forum
Photos
Videos
Chat
Marketplace
Events
Bookmarks
People
When to Buy and Sell #2: Support & Resistance
Linear Mode
