What is Resistance & Support?

What is the difference between support and resistance?

If a share has taken support at a price level, it is considered to be in a downward movement. It stops then moves in the upward direction. Vice versa, a share can be said to have taken Resistance when it is in an upward movement. It stops and then moves in the downward direction.

What is the best way to use the Support and Resistance theory?

In an Uptrend, it is a good idea to buy or go long every fall at a strong support level. However, in a Downtrend, you should sell or go short every rise at a substantial resistance level.

Are there tools for resistance and support?

Yes. Here are some tools to support and resist:

  • Significant Highs and Lowers
  • Trendline

These levels are the ones where the market has experienced sharp rises or falls in the past. These levels will be strong support and resistance levels when stock prices test them in the future.
Another excellent tool is the trendline. It provides important support and resistance levels. A trendline is a line that joins 2 (preferably 3) or more significant highs and lows, or 2 (preferably 3), important prices. This provides important support levels and resistance levels.

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