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Using Support and Resistance to Predict Price

Started by Zach Bass · 9 months ago

Stocks move up and stocks move down. And like all things like bananas, price is ultimately determined by supply and demand. If demand goes up, the price goes up. If the supply goes up, the price goes down. If demand goes up and supplies goes down; well, let’s just hope you boug ... Continue reading »

2 comments

  • trinicheme

    1 year ago

    I am still having some trouble predicting where to establish support and resistance of any random company that I may look at. Does it have to be over a small period of time or over a period of a couple months?
    reply
  • Zach Bass

    1 year ago

    Price support is pretty easy to figure. Here's a simplistic, yet practical view. Simply draw a horizontal line across the chart and move it up and down until the tops and bottoms of candle sticks line up. Do this using several time frames (3 month, 6 month, and 1 year charts). The more candle sticks that line up, the stronger the support or resistance.

    But be careful, you must use this in conjunction with volume. Having many price points that line up on relatively weak volume, are not nearly as strong a few price points that line up on really strong volume.
    reply

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