The Basics of Technical Analysis Part 1: Finding Support and Resistance
Support levels are usually below the current price but it’s not a rare sight to see a stock trade at or around its support. Since technical analysis isn’t a precise science, many times trades can go through at a lower price than support before rebounding. Support is made once the demand for shares overpowers those that are selling. Many times support is established after a stock’s price bounces at or near a certain price more than once. The most popular moving averages are also used as support, the most used moving averages include the 32-day, 50-day and 200-day. Resistance and support are…