What are Supports and Resistances
Supports and resistances are two of the most important concepts in the technical analysis of stock markets. They refer to price levels at which the market either finds strong support or encounters strong resistance and in turn, are used to predict potential price movements. These two terms are so important in the stock market because they can provide investors with valuable insights on how to buy and sell stocks. In this article, we will cover the definition of supports and resistances, as well as how to identify them and their benefits. We will also discuss common mistakes to avoid when identifying supports and resistances, and provide a summary of the article.
Starting with the definition of supports
and resistances, they can be defined as price points that the market either
finds strong support or encounters strong resistance. When the price reaches a
support level, it is said to be “supported” and when it reaches a resistance
level, it is said to be “resisted”. This means that the price is likely to find
support or resistance at certain levels and as a result, investors should watch
for these levels when analyzing the price of a stock. There are several
types of support and resistance that investors should be aware of. For example,
there are support and resistance levels, which refer to specific price points
that the market either finds support or resistance. In addition, there are
range supports and resistances which refer to the price points that the market
finds support or resistance within a particular range. There are also trend
supports and resistances, which refer to the directional movements of the
market and can help investors identify potential trend reversals.
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