RESISTANCE
•RESISTANCE IS THE PRICE LEVEL AT WHICH SELLING IS THOUGHT TO BE STRONG ENOUGH TO PREVENT THE PRICE FROM RISING FURTHER.
•IN SIMPLE WORD AT RESISTANCE LEVEL DEMAND IS LOW AND SUPPLY HIGH SO STOCK PRICE REVERSE OF MOVE TIME FROM THAT LEVEL MOST OF TIME.
•RESISTANCE LEVEL INDICATE SELL ON REVERSAL IN PRICE AND BUY ON BREAKOUT ON CHART.
BUY OR SELL ON RESISTANCE?
•BUY- A BREAK ABOVE RESISTANCE SHOWS A NEW WILLINGNESS TO BUY AND/OR A LACK OF INCENTIVE TO SELL. RESISTANCE BREAKS AND NEW HIGHS INDICATE BUYERS HAVE INCREASED THEIR EXPECTATIONS AND ARE WILLING TO BUY AT EVEN HIGHER PRICES.
•SELL- A REVERSAL IN PRICE FROM RESISTANCE LEVEL INDICATE SELL ON STOCK AS STOCK BULLS NOT ABLE TO WIN OVER BEARS THAT LEVEL SO WAIT FOR CONFIRMATION OF REVERSAL AND SELL STOCK.
TYPE OF RESISTANCE LINES
•HORIZONTAL RESISTANCE LINE- WHEN RESISTANCE LINE DRAW ON THE BASIS OF HORIZONTAL THAT CALLED HORIZONTAL RESISTANCE LINE.
•DIAGONAL RESISTANCE LINE- WHEN RESISTANCE LINE DRAW ON DIAGONAL BASIS LIKE UPTREND OF DOWNTREND IN CHART THAT CALLED DIAGONAL RESISTANCE LINE. I AM FOLLOW THIS MOSTLY FOR USE.
Wrote by ROHIT SINGH
