Find support and resistance levels
How to use trend lines
👉TA Challenge: How to draw support levels like a pro?
👉TA Challenge: Chart to find breakdown stocks
👉TA Challenge: How to draw support levels like a pro?
👉TA Challenge: Chart to find breakdown stocks
I think I can understand support levels and pressure levels this way
1. The previous low of the stock price was a support level.
1. The previous low of the stock price was a support level.
2. When the stock price falls back after reaching a high point, we can treat the high stock price as a resistance level.
3. When the stock price breaks through the resistance level and reaches another high, then the previous resistance level becomes a support level, and the new high becomes a new resistance level.
4. When the stock price breaks through resistance, it means that the stock price continues to rise; conversely, when the stock price falls below the support level, it means that the stock price continues to fall very much.
Examples of exercises:
Here I used $Global X Nasdaq 100 Covered Call ETF(QYLD.US$ Let's explain the weekly K-line:
It would be easier to understand if you read the chart and then the explanation![]()
![]()
![]()
A-1 is the previous low, and we can use it as a support level. You can see that the stock price continued to rise even after falling below 1.
B- When the stock price continues to rise to a new high of 3 and then falls back, we can use 3 as a resistance level.
C- When the stock price reaches the resistance level, it falls back to 2 to retest the previous support level of 1.
D- When the stock price breaks through the resistance level, it means that the stock price continues to rise very strongly. With resistance levels 3 and 6, you can find that the stock price continues to rise after breaking through the resistance level.
E- When the stock price breaks through the resistance level and continues to rise to another high of 4, the new high becomes a new resistance level, and the previous resistance level (3 and 6) becomes a new support level. (In fact, in the chart, you can see that resistance levels 3 and 6 were tested several times before the stock price reached “4”)
F- When the stock price falls below the support level, it means that the stock price will continue to fall. Retest support levels 3 and 6 when the stock price reaches resistance level 4. When the stock price falls below the support level of 5, you can find that the stock price continues to fall. At this point, 5 becomes a new resistance level, and the stock price will retest previous support levels 1 and 2.
How to operate when the stock price reaches support and resistance levels
Now that we know the basics of drawing lines, let's dive deeper! Use some technical indicators to determine how to operate when the stock price reaches a support or resistance level. Here I used the technical indicator MACD to judge.
A. When the stock price reached a new high of resistance level 3, the technical indicator MACD was at a dead end and began to fall below the zero axis. At this point, the stock price began to retest support level 2.
B. When the stock price reaches the support level, we can use MACD to determine when to buy. The stock price rebounded after reaching support level 2. When the MACD joined the gold fork, this was a buying opportunity.
C. When the stock price returns to resistance level 6, you can find that the MACD has reached above the zero axis. At this point, the stock price breaks through resistance level 6 and continues to rise.
D. When the stock price reaches resistance level 4, you can find that the MACD has diverged, which means that the stock price may reverse.
E. When the stock price falls back to resistance 5, you can see that the MACD has now reached below the zero axis. At this point, the stock price falls below support level 5.
F. Based on current observations, the MACD is still below the zero axis, so the stock price is likely to retest the positions of support levels 1 and 2.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
steady Pom pipi OP :
steady Pom pipi OP : If only I had learned this knowledge when I bought it!![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
NANA123 steady Pom pipi OP : It's not too late![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
steady Pom pipi OP NANA123 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")