How Do You Calculate Support & Resistance For Stocks?
When analyzing stocks, key technical indicators include the price-support and price-resistance levels. These are visual indicators of basic supply and demand in the stock. Many investors rely on support and resistance to provide buy and sell signals. These indicators are easy to understand and to follow on a chart that shows price movements in any increment of time, from tick charts to 5-minute charts to monthly ones. Obtain a price chart for the stock you wish to follow. These charts are readily available through an Internet financial-news service, through a proprietary site available by monthly subscription, or in hard-copy form in newspapers and/or financial journals. Decide on the time-frame for price movements. Stock charts can show price movements in increments as short as single “ticks” (indicating single trades) to as long as monthly ones. Generally, the longer the time frame, the more significant the support and resistance levels. You may compare several different time frames,
