Hands-On Data Analysis with Pandas

Adding reference lines

Quite often, we want to draw attention to a specific value on our plot, perhaps as a boundary or turning point. We may be interested in whether the line gets crossed or serves as a partition. In finance, horizontal reference lines may be drawn on top of the line plot of a stock's price, marking the support and the resistance.

The support is a price level at which a downward trend is expected to reverse because the stock is now at a price level at which buyers are more enticed to purchase, driving the price up and away from this point. On the flip side, the resistance is the price level at which an upward trend is expected to reverse since the price is an attractive selling point; thus the price falls down and away ...