Contacts

Generally defined, support is a price level from which the market is expected to recover should it decline following a price rally. Resistance is a price level from which the market will decline following rallies in a declining trend.

Support is used for the purpose of establishing long positions on price reactions or corrections during rising markets. Resistance is the price level used to establish positions on rallies during bear trends.

Throughout the history of the stock and futures markets, there have been many efforts to specifically define support and resistance levels or 40 Chapter Four areas. Each school of market analysis has developed its own methodology.

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