Hello, everyone, resistance and support in stock market are the building blocks for analyzing any technical charts.

Hello, everyone, resistance and support in stock market are the building blocks for analyzing any technical charts. These can be used to analyze charts of any markets, forex, commodity currency, etc.

Resistance and support in stock market are the psychological levels on the chart from there the prices tend to bounce back for more than two to three times. Support helps the trader to enter the trade when the stock prices bounce back from the support level. Resistance on the other hand helps the traders to exit and sell the stock when the prices are at this level.

Now let us discuss in detail, what they actually are. So firstly, what is a support? support is a level where demand for the stock is more than the supply. So when the prices keep going down, they get cheaper and cheaper and buyer gets inclined to buy the stocks at the cheaper prices. Sometimes this level gets broken, which signals that the bears have won over the bulls and they are willing to sell more even at the lower prices.

Now when the support breaks another level of support is formed beneath that level and that level becomes resistance. So if the price is bounce back from the support level, the buyer may enter the trade and take a long position. As you see on the screen from the daily chart of Vedanta, how the level of 175 is an important level. The prices have fallen down and bounced back from that level two to three times.

Now, after the break in support level, we can see how it has become new resistance for the stock. So the next one is what is resistance? Resistance is the level where selling pressure is more than the buying pressure. When the prices keep moving up, the sellers get more inclined to sell at higher prices and supply gets greater than the demand ones the resistance level gets broken bulls take over the bears, a new resistance is formed above it and now that resistance level becomes new support level for the prices.

If the prices bounce back from the resistance level, the buyer may exit that the trade and the seller may take a short position. Here, you can see from the daily chart of HDFC bank, that when the prices have come to 2150 level, they are not able to move above this resistance level.

Finally, at the last point, the bulls are able to break the resistance level and move the price upwards.