5 HOW TO IDENTIFY SUPPORT AND RESISTANCE ZONES
Support and resistance are two basic building blocks of the technical arsenal. They form a key role in price pattern analysis, which we will address later. A lot of people use the term support when they really mean resistance and use resistance when they really mean support. It’s no wonder that there is a lot of confusion. Basically, these are points on a chart where the probabilities favor at least a temporary halt in the prevailing trend.
Support and Resistance
In their classic book Technical Analysis of Stock Trends, Edwards and Magee defined support as “buying (actual or potential) sufficient in volume to halt a downtrend in prices for an appreciable period,” and resistance as “selling (actual ...