Support & Resistance

Support & Resistance Report
Helping Stock Traders Make Better Entries And Exits

Introduction:

When two or more individual aspects of Support converge, they form an area of Gathering Support.

When two or more individual aspects of Resistance converge, they form an area of Gathering Resistance.

Areas of Gathering Support and Gathering Resistance represent much more reliable trading opportunities than do individual aspects of Support or Resistance that stand alone.

The Support & Resistance Report uses the following individual aspects of Support and Resistance to identify areas of Gathering Support and Gathering Resistance for the trading community.


Individual Aspects of Support & Resistance
From the Daily Chart:
20MA   50MA    200MA   BBR    BBS   
PIVOT    S2   R2    HI   LO   CL   
From the Weekly Chart:
20wma    wBBR   wBBS   
wPIVOT    wS2   wR2    WK HI   WK LO    WK CL   
From the Monthly Chart:
20mma    mBBR   mBBS   
mPIVOT    mS2   mR2    MN HI   MN LO    MN CL   
From the Point & Figure Chart:
D-Top   D-Bot    T-Top   T-Bot    BSL   BRL   
10-Week Trading Band:
10wtbHI   10wtb50    10wtbLO   
Fibonacci Numbers:
PEAK++    FIB 38   FIB 50    FIB 62    LOW++   
Back



20-Day Moving Average (20MA)

The 20-Day Moving Average (hereafter, referred to as '20MA'), is one of three moving average lines commonly applied to a Daily Chart.

Based on 20 days of closing prices, it identifies the short-term trend of a stock.

Why do traders care?

  • '20MA', like all moving averages, tends to provide Support to stocks that are trading above it and Resistance to stocks that are trading below it.

    If '20MA' is trending down on a Daily Chart, then sellers are in short-term control.   When sellers are in control, it's best to avoid a purchase unless price falls to an area of Gathering Support.

    If '20MA' is trending up on a Daily Chart, then buyers are in short-term control.   When buyers are in control, it's best to avoid a short-sale unless price rises to an area of Gathering Resistance.

  • Bollinger Bands

    A stock that closes below '20MA' has an increased chance of falling (over a period of days) to Bollinger Band Support (BBS).

    A stock that closes above '20MA' has an increased chance of rising (over a period of days) to Bollinger Band Resitance (BBR).

  • The Gathering of Support and Resistance:

    • '20MA' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that '20MA' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   50MA    200MA    BBS    BBR

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50-Day Moving Average (50MA)

The 50-Day Moving Average (hereafter, referred to as '50MA'), is one of three moving average lines commonly applied to a Daily Chart.

Based on 50 days of closing prices, it identifies the intermediate-term trend of a stock.

Why do traders care?

  • '50MA', like all moving averages, tends to provide Support to stocks that are trading above it and Resistance to stocks that are trading below it.

    If '50MA' is trending down on a Daily Chart, then sellers are in intermediate-term control.   When sellers are in control, it's best to avoid a purchase unless price falls to an area of Gathering Support.

    If '50MA' is trending up on a Daily Chart, then buyers are in intermediate-term control.   When buyers are in control, it's best to avoid a short-sale unless price rises to an area of Gathering Resistance.

  • Fund Managers

    Fund Managers tend to base their trades on the intermediate-term trend.   Since they manage enough money to move markets, it's best to trade with them rather than against them.   Awareness of what's happening at '50MA', therefore, helps individual traders accomplish that goal.

  • The Gathering of Support and Resistance:

    • '50MA' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that '50MA' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   20MA    200MA

Go To:   Top    Back    Trading Rules   


200-Day Moving Average (200MA)

The 200-Day Moving Average (hereafter, referred to as '200MA'), is one of three moving average lines commonly applied to a Daily Chart.

Based on 200 days of closing prices, it identifies the long-term trend of a stock.

Why do traders care?

  • '200MA', like all moving averages, tends to provide Support to stocks that are trading above it and Resistance to stocks that are trading below it.

    If '200MA' is trending down on a Daily Chart, then sellers are in long-term control.   When sellers are in control, it's best to avoid a purchase unless price falls to an area of Gathering Support.

    If '200MA' is trending up on a Daily Chart, then buyers are in long-term control.   When buyers are in control, it's best to avoid a short-sale unless price rises to an area of Gathering Resistance.

  • '200MA' and Bear Markets

    When price moves below '200MA', it can serve as an early warning that a bull market is turning into a bear.   If the 50-Day Moving Average (50MA) crosses below '200MA', it's an even more serious warning.

  • The Gathering of Support and Resistance:

    • '200MA' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that '200MA' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   20MA    50MA

Go To:   Top    Back    Trading Rules   


Bollinger Band Resistance (BBR) 

Bollinger Band Resistance (hereafter, referred to as 'BBR') represents short-term Resistance based on the previous 20 days of price action.

Why do traders care?

96% of a stock's short-term price action occurs within the boundaries of Bollinger Band Resistance (BBR) and Bollinger Band Support (BBS).

A stock that rises to or above 'BBR', therefore, has moved into overbought territory from a short-term perspective, making it vulnerable to profit-taking.

For an example of Bollinger Bands, click here.

See Also:    BBS    20MA

  • The Gathering of Resistance:

    • 'BBR' will be more effective in providing Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'BBR' is not standing alone; but rather, that it is part of a stronger area of Gathering Resistance.

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Bollinger Band Support (BBS) 

Bollinger Band Support (hereafter, referred to as 'BBS') represents short-term Support based on the previous 20 days of price action.

Why do traders care?

96% of a stock's short-term price action occurs within the boundaries of Bollinger Band Support (BBS) and Bollinger Band Resistance (BBR).

A stock that falls to or below 'BBS', therefore, has moved into oversold territory from a short-term perspective, increasing the probability an oversold bounce.

For an example of Bollinger Bands, click here.

  • The Gathering of Support:

    'BBS' will be more effective in providing Support when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'BBS' is not standing alone; but rather, that it is part of a stronger area of Gathering Support.

See Also:    BBR    20MA

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Daily Pivot 

Professional traders have long used Pivot Points to help them identify lines of Support and lines of Resistance within a given day.

The Daily Pivot (PIVOT) represents neutrality within the current day.   It tends to serve, therefore, as Support to stocks that are trading above it and as Resistance to stocks that are trading below it.

Its value is derived from the previous day's High, Low and Closing Price and, therefore, changes with each new day.

Why do traders care?

A stock that trades above its Daily Pivot is demonstrating neutral to bullish behavior within the current day.  It will often rise, sometime during the day, to Resistance at the Daily R2 Pivot (R2) at which time it is viewed as being overbought on the day.

A stock that trades below its Daily Pivot is demonstrating neutral to bearish behavior within the current day.  It will often fall, sometime during the day, to Support at the Daily S2 Pivot (S2) at which time it is viewed as being oversold on the day.

Used for the following types of trades:

1) Day Trades (intraday trades)

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Daily S2 Pivot 

The Daily S2 Pivot (S2) represents Support within the current day.

Its value is derived from the previous day's High, Low and Closing Price and, therefore, changes with each new day.

Why do traders care?

A stock that trades either at or below its Daily S2 Pivot is viewed as being oversold within the current day.

A falling stock will often find Support, therefore, at its Daily S2 Pivot.

See Also:
    Daily Pivot (PIVOT)     Daily R2 Pivot (R2)

Used for the following types of trades:

1) Day Trades (intraday trades)

2) Many traders rely on the Daily S2 Pivot in isolation.  A more effective trading strategy, however, is to establish a trade when the S2 Pivot coverges with one or more other individual aspects of Support. This convergence or "gathering" of two or more individual aspects of Support is highlighted in blue on the 'Support & Resistance Table' and is referred to as an area of 'Gathering Support'.

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Daily R2 Pivot 

The Daily R2 Pivot (R2) represents Resistance within the current day.

Its value is derived from the previous day's High, Low and Closing Price and, therefore, changes with each new day.

Why do traders care?

A stock that trades either at or above its Daily R2 Pivot is viewed as being overbought within the current day.

The Daily R2 Pivot represents Resistance, therefore, within the current day.

See Also:
    Daily Pivot (PIVOT)     Daily R2 Pivot (S2)

Used for the following types of trades:

1) Day Trades (intraday trades)

2) Many traders rely on the Daily R2 Pivot in isolation.  A more effective trading strategy, however, is to establish a trade when the R2 Pivot coverges with one or more other individual aspects of Resistance. This convergence or "gathering" of two or more individual aspects of Resistance is highlighted in blue on the 'Support & Resistance Table' and is referred to as an area of 'Gathering Resistance'.

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Previous Day's High

The Previous Day's High (HI) represents Resistance within the current day.

Why do traders care?

The Previous Day's High is the price at which sellers regained control from buyers and moved the price back down.  

The Previous Day's High, therefore, represents Resistance within the current day.

If, however, a stock moves above Resisstance at the Previous Day's High, then the Previous Day's High can begin to serve as Support (Resistance, when broken by a rising price, tends to be transformed by the break into Support).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)

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Previous Day's Low

The Previous Day's Low (LO) represents Support within the current day.

Why do traders care?

The Previous Day's Low is the price at which buyers regained control from sellers and moved the price back up.  

The Previous Day's Low, therefore, represents Support within the current day.

If, however, a stock moves below Support at the Previous Day's Low, then the Previous Day's Low can begin to serve as Resistance (Support, when broken by a falling price, tends to be transformed by the break into Resistance).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)

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Previous Day's Close (CL)

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20-Week Moving Average 

The 20-Week Moving Average (20wma) identifies the intermediate-term trend of a stock.

Why do traders care?

The 20-Week Moving Average always serves as the middle line that separates Bollinger Band Support (wBBS) and Bollinger Band Resistance (wBBR).

In major downtrends, price fluctuates between the 20-Week Moving Average (Resistance) and Bollinger Band Support (wBBS).  In order to signal the end of a major downtrend, a minimum requirement is that price closes back above the 20-Week Moving Average.

In major uptrends, price fluctuates between the 20-Week Moving Average (Support) and Bollinger Band Resistance (wBBR).  In order to signal the end of a major uptrend, a minimum requirement is that price closes back below the 20-Week Moving Average.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting from weeks to months)

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Bollinger Band Resistance (wBBR) 

Bollinger Band Resistance, (hereafter, referred to as 'wBBR') is commonly applied to a
Weekly Chart.

Based on 20 weeks of price action, it represents intermediate-term Resistance.

Why do traders care?

96% of a stock's intermediate-term price action occurs within the boundaries of Bollinger Band Resistance (wBBR) and Bollinger Band Support (wBBS).

A stock that rises to or above 'wBBR', therefore, has moved into overbought territory from an intermediate-term perspective, making it vulnerable to profit-taking.

See Also:
    20-Week Moving Average (20wma)
    Bollinger Band Support (wBBS)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)

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Bollinger Band Support (wBBS) 

Bollinger Band Support, (hereafter, referred to as 'wBBS') is commonly applied to a
Weekly Chart.

Based on 20 weeks of price action, it represents intermediate-term Support.

Why do traders care?

96% of a stock's intermediate-term price action occurs within the boundaries of Bollinger Band Support (wBBS) and Bollinger Band Resistance (wBBR).

A stock that falls to or below 'wBBS', therefore, has moved into oversold territory from an intermediate-term perspective, increasing the probability an oversold bounce.

See Also:
    20-Week Moving Average (20wma)
    Bollinger Band Resistance (wBBR)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)

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Weekly Pivot 

Professional traders have long used Pivot Points to help them identify lines of Support and lines of Resistance within a given week.

The Weekly Pivot (wPIVOT) represents neutrality within the current week.   It tends to serve, therefore, as Support to stocks that are trading above it and as Resistance to stocks that are trading below it.

Its value is derived from the previous week's High, Low and Closing Price and, therefore, changes every Monday.

Why do traders care?

A stock that trades above its Weekly Pivot is demonstrating neutral to bullish behavior within the current week.  It will often rise, sometime during the week, to Resistance at the Weekly R2 Pivot (wR2) at which time it is viewed as being overbought on the week.

A stock that trades below its Weekly Pivot is demonstrating neutral to bearish behavior within the current week.  It will often fall, sometime during the week, to Support at the Weekly S2 Pivot (wS2) at which time it is viewed as being oversold on the week.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days within the current week)

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Weekly S2 Pivot 

The Weekly S2 Pivot (wS2) represents Support within the current week.

Its value is derived from the previous week's High, Low and Closing Price and, therefore, changes every Monday.

Why do traders care?

A stock that trades either at or below its Weekly S2 Pivot is viewed as being oversold within the current week.

The Weekly S2 Pivot represents Support, therefore, within the current week.

See Also:
    Weekly Pivot (wPIVOT)     Weekly R2 Pivot (wR2)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days within the current week)

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Weekly R2 Pivot 

The Weekly R2 Pivot (wR2) represents Resistance within the current week.

Its value is derived from the previous week's High, Low and Closing Price and, therefore, changes every Monday.

Why do traders care?

A stock that trades either at or above its Weekly R2 Pivot is viewed as being overbought within the current week.

The Weekly R2 Pivot represents Resistance, therefore, within the current week.

See Also:
    Weekly Pivot (wPIVOT)
    Weekly S2 Pivot (wS2)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days within the current week)

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Last Week's High

Last Week's High (WK HI) represents Resistance within the current week.

Why do traders care?

Last Week's High is the price at which sellers regained control from buyers and moved the price back down.  

Last Week's High, therefore, represents Resistance within the current week.

If, however, a stock closes above Resisstance at Last Week's High, then Last Week's High can begin to serve as Support (Resistance, when broken by a rising price, tends to be transformed by the break into Support).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)

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Last Week's Low

Last Week's Low (WK LO) represents Support within the current week.

Why do traders care?

Last Week's Low is the price at which buyers regained control from sellers and moved the price back up.  

Last Week's Low, therefore, represents Support within the current week.

If, however, a stock closes below Support at Last Week's Low, then Last Week's Low can begin to serve as Resistance (Support, when broken by a falling price, tends to be transformed by the break into Resistance).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)

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Last Week's Close (WK CL)

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20-Month Moving Average 

The 20-Month Moving Average (20mma) identifies the long-term trend of a stock.

Why do traders care?

The 20-Month Moving Average, like all moving averages, tends to provide Support to stocks that are trading above it and Resistance to stocks that are trading below it.

The 20-Month Moving Average serves as the middle line that separates Bollinger Band Support (mBBS) and Bollinger Band Resistance (mBBR).

A stock that closes above its 20-Month Moving Average often rises (over a period of months) to Bollinger Band Resistance (mBBR).

A stock that closes below its 20-Month Moving Average often falls (over a period of months) to Bollinger Band Support (mBBS).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting from weeks to months)
4) Long-Term Trades (lasting months to years)

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Bollinger Band Resistance (mBBR) 

Bollinger Band Resistance, (hereafter, referred to as 'mBBR') is commonly applied to a Monthly Chart.

Based on 20 months of price action, it represents long-term Resistance.

Why do traders care?

96% of a stock's long-term price action occurs within the boundaries of Bollinger Band Resistance (mBBR) and Bollinger Band Support (mBBS).

A stock that rises to or above 'mBBR', therefore, has moved into overbought territory from a long-term perspective, making it vulnerable to profit-taking.

See Also:
    20-Month Moving Average (20mma)
    Bollinger Band Support (mBBS)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Bollinger Band Support (mBBS) 

Bollinger Band Support, (hereafter, referred to as 'mBBS') is commonly applied to a Monthly Chart.

Based on 20 months of price action, it represents long-term Support.

Why do traders care?

96% of a stock's long-term price action occurs within the boundaries Bollinger Band Support (mBBS) and Bollinger Band Resistance (mBBR).

A stock that falls to or below 'mBBS', therefore, has moved into oversold territory from a long-term perspective, increasing the probability an oversold bounce.

See Also:
    20-Month Moving Average (20mma)
    Bollinger Band Resistance (mBBR)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Monthly Pivot 

Professional traders have long used Pivot Points to help them identify lines of Support and lines of Resistance within a given Month.

The Monthly Pivot (mPIVOT) represents neutrality within the current month.   It tends to serve, therefore, as Support to stocks that are trading above it and as Resistance to stocks that are trading below it.

Its value is derived from the previous month's High, Low and Closing Price and, therefore, changes on the first of each new month.

Why do traders care?

A stock that trades above its Monthly Pivot is demonstrating neutral to bullish behavior within the current month.  It will often rise, sometime during the month, to Resistance at the Monthly R2 Pivot (mR2) at which time it is viewed as being overbought on the month.

A stock that trades below its Monthly Pivot is demonstrating neutral to bearish behavior within the current month.  It will often fall, sometime during the month, to Support at the Monthly S2 Pivot (mS2) at which time it is viewed as being oversold on the month.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting 1 or more weeks within the current month)

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Monthly S2 Pivot 

The Monthly S2 Pivot (mS2) represents Support within the current month.

Its value is derived from the previous month's High, Low and Closing Price and, therefore, changes on the first of each month.

Why do traders care?

A stock that trades either at or below its Monthly S2 Pivot is viewed as being oversold within the current month.

The Monthly S2 Pivot represents Support, therefore, within the current month.

See Also:
    Monthly Pivot (mPIVOT)     Monthly R2 Pivot (mR2)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting 1 or more weeks within the current month)

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Monthly R2 Pivot 

The Monthly R2 Pivot (mR2) represents Resistance within the current month.

Its value is derived from the previous month's High, Low and Closing Price and, therefore, changes on the first of each new month.

Why do traders care?

A stock that trades either at or above its Monthly R2 Pivot, is viewed as being overbought within the current month.

The Monthly R2 Pivot represents Resistance, therefore, within the current month.

See Also:
    Monthly Pivot (mPIVOT)     Monthly S2 Pivot (mS2)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting 1 or more weeks within the current month)

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Last Month's High

Last Month's High (MN HI) represents Resistance within the current month.

Why do traders care?

Last Month's High is the price at which sellers regained control from buyers and moved the price back down.  

Last Month's High, therefore, represents Resistance within the current month.

If, however, a stock closes above Resisstance at Last Month's High, then Last Month's High can begin to serve as Support (Resistance, when broken by a rising price, tends to be transformed by the break into Support).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks within the current month)

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Last Month's Low

Last Month's Low (MN LO) represents Support within the current month.

Why do traders care?

Last Month's Low is the price at which buyers regained control from sellers and moved the price back up.  

Last Month's Low, therefore, represents Support within the current month.

If, however, a stock closes below Support at Last Month's Low, then Last Month's Low can begin to serve as Resistance (Support, when broken by a falling price, tends to be transformed by the break into Resistance).

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks within the current month)

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Last Month's Close (MN CL)

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Double-Top Breakout 

A Double-Top Breakout (D-Top) is the price at which buyers have overcome a previous level of Resistance.

It's best identified by a stock's Point & Figure Chart.

Why do traders care?

A Double-Top Breakout is the most basic of 'Buy' Signals.

The price that represents a Double-Top Breakout can serve as Resistance upon first approach.

Once a Double-Top Breakout is established, however, it tends to serve as Support
on pullbacks to it.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Double-Bottom Breakdown 

A Double-Bottom Breakdown (D-Bot) is the price at which sellers have overcome a previous level of Support.

It's best identified by a stock's Point & Figure Chart.

Why do traders care?

A Double-Bottom Breakdown is the most basic of 'Sell' Signals.

The price that represents a Double-Bottom Breakdown can serve as Support upon first approach.

Once a Double-Bottom Breakdown is established, however, it tends to serve as Resistance
on bounce-backs to it.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Triple-Top Breakout 

A Triple-Top Breakout (T-Top) is the price at which buyers have overcome two previous levels of Resistance.

It's best identified by a stock's Point & Figure Chart.

Why do traders care?

A Triple-Top Breakout is a stronger 'Buy' Signal than the basic Double-Top Breakout (D-Top).

The price that represents a Triple-Top Breakout can serve as Resistance upon first approach.

Once a Triple-Top Breakout is established, however, it tends to serve as Support
on pullbacks to it.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Triple-Bottom Breakdown 

A Triple-Bottom Breakdown (T-Bot) is the price at which sellers have overcome two previous levels of Support.

It's best identified by a stock's Point & Figure Chart.

Why do traders care?

A Triple-Bottom Breakdown is a stronger 'Sell' Signal than the basic Double-Bottom Breakdown.

The price that represents a Triple-Bottom Breakdown can serve as Support upon first approach.

Once a Triple-Bottom Breakdown is established, however, it tends to serve as Resistance
on bounce-backs to it.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Bullish Support Line 

A Bullish Support Line (BSL) is a rising blue Trend Line that represents Support within the prevailing up trend.

Why do traders care?

A Bullish Support Line most often serves as a "brick wall" of Support to a falling stock.

Traders, therefore, like to close a short position and venture a purchase at a Bullish Support Line.  

A Bullish Support Line that fails to provide Support, however, represents a potential change in the prevailing trend from up to down.

Stocks that approach their Bullish Support Line during today's trade will be listed in the Notable Events section of tonight's report.   This type of trade is suitable for those who don't have time to watch the market closely and who like their trades to last anywhere from days to weeks or even months. Because there are no guarantees in the market, however, Protective Stop Orders are still required.

QuoteTracker Users can receive real-time alerts for stocks that either fall to their Bullish Support Line (BSL) or rise to their Bearish Resistance Line (BRL) by importing into QuoteTracker the 'BSL/BRL' Alerts from the Alerts link at the top of the Market Analysis web page.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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Bearish Resistance Line 

A Bearish Resistance Line (BRL) is a falling red Trend Line that represents Resistance within the prevailing down trend.

Why do traders care?

A Bearish Resistance Line most often serves as a "brick wall" of Resistance to a rising stock.

Traders, therefore, like to close a long position and venture a short-sale at a Bearish Resistance Line.

A Bearish Resistance Line that fails to provide Resistance, however, represents a potential change in the prevailing trend from down to up.

Stocks that approach their Bearish Resistance Line during today's trade will be listed in the Notable Events section of tonight's report.   This type of trade is suitable for those who don't have time to watch the market closely and who like their trades to last anywhere from days to weeks or even months. Because there are no guarantees in the market, however, Protective Stop Orders are still required.

QuoteTracker Users can receive real-time alerts for stocks that either rise to their Bearish Resistance Line (BRL) or fall to their Bullish Support Line (BSL) by importing into QuoteTracker the 'BSL/BRL' Alerts from the Alerts link at the top of the Market Analysis web page.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting weeks to months)
4) Long-Term Trades (lasting months to years)

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High End of the 10-Week Trading Band 

The High End of the 10-Week Trading Band (10wtbHI) represents strong Resistance to a rising stock.

Its value is based on 10 weeks of price data plus a volatility factor.

Why do traders care?

A stock that rises to (or temporarily beyond) the High End of the 10-Week Trading Band is extremely overbought, making it extremely vulnerable, therefore, to a pullback.

Swing Traders like to establish a short position at the High End of the 10-Week Trading Band and then close the position when the price pulls back to the Middle of the 10-Week Trading Band (10wtb50).

QuoteTracker Users can receive real-time alerts for stocks that either rise to the High End of the 10-Week Trading Band (10wtbHI) or fall to the Low End of the 10-Week Trading Band (10wtbLO) by importing into QuoteTracker the '10wtbLO/10wtbHI' Alerts from the Alerts link at the top of the Market Analysis web page.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting from weeks to months)

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Middle of the 10-Week Trading Band 

The Middle of the 10-Week Trading Band  (10wtb50) represents neutrality for the previous 10-week period and may serve, therefore, as either Support or Resistance.

Why do traders care?

A stock that trades above the Middle of the 10-Week Trading Band is demonstrating neutral to bullish behavior based on the previous 10 weeks of price action.   It will sometimes, over a period of days or weeks, rise to Resistance at the High End of the 10-Week Trading Band (10wtbHI), at which point it is extrememly overbought.

A stock that trades below the Middle of the 10-Week Trading Band is demonstrating neutral to bearish behavior based on the previous 10 weeks of price action.   It will sometimes, over a period of days or weeks, fall to Support at the Low End of the 10-Week Trading Band (10wtbLO), at which point it is extrememly oversold.

See also:
    High End of the 10-Week Trading Band (10wtbHI)
    Low End of the 10-Week Trading Band (10wtbLO)

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting from weeks to months)

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Low End of the 10-Week Trading Band 

The Low End of the 10-Week Trading Band (10wtbLO) represents strong Support to a falling price.

Its value is based on 10 weeks of price data plus a volatility factor.

Why do traders care?

A stock that falls to (or temporarily below) the Low End of the 10-Week Trading Band is extremely oversold, greatly increasing, therefore, the probability of an oversold bounce.

Swing Traders like to venture a purchase at the Low End of the 10-Week Trading Band and then close the position when the price rises to the Middle of the 10-Week Trading Band (10wtb50).

QuoteTracker Users can receive real-time alerts for stocks that either fall to the Low End of the 10-Week Trading Band (10wtbLO) or rise to the High End of the 10-Week Trading Band (10wtbHI) by importing into QuoteTracker the '10wtbLO/10wtbHI' Alerts from the Alerts link at the top of the Market Analysis web page.

Used for the following types of trades:

1) Day Trades (intraday trades)
2) Short-Term Trades (lasting 2 or more days)
3) Intermediate-Term Trades (lasting from weeks to months)

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Peak of a Trend (PEAK++)

The Peak of a Trend (hereafter, referred to as 'PEAK++'), is the highest price to which buyers were able to push a stock before surrendering control to sellers.

Why do traders care?

  • 'PEAK++' is the price at which buyers lost control to sellers.   It represents, therefore, Resistance to a rising price.

    Broken Resistance, however, is a sign that buyers are back in control; and that it's a good idea to either venture a purchase or add to an already established long position.

    'PEAK++' is also used in combination with LOW++ to calculate the three Fibonacci Lines (FIB 38, FIB 50 and FIB 62) that are commonly applied to a trend.

  • The Gathering of Resistance:

    • 'PEAK++' will be more effective in providing Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'PEAK++' is not standing alone; but rather, that it is part of a stronger area of Gathering Resistance.


See Also:   LOW++    FIB 38    FIB 50    FIB 62

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Fibonacci 38% Line (FIB 38)

The Fibonacci 38% Line (hereafter, referred to as 'FIB 38') is one of three Fibonacci Lines that are commonly apllied to a trend.   It represents 38% of an entire trend as measured from the trend's peak (PEAK++) to its low (LOW++).

Why do traders care?

  • When Price Is Falling:

    • 'FIB 38' tends to provide Support to a falling price.   It's where an uptrend, having pulled back, often regains its footing and recaptures lost ground on its way to test Resistance at the trend's peak (PEAK++).

    Broken Support, however, is viewed as a Sell Signal that opens the door to a test of lower, but more important Support at the Fibonacci 50% Line (FIB 50).

  • When Price Is Rising:

    • 'FIB 38' tends to provide Resistance to a rising price.

    Broken Resistance, however, is viewed as a Buy Signal that opens the door to a test of higher Resistance at the trend's peak (PEAK++).

  • The Gathering of Support and Resistance:

    • 'FIB 38' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'FIB 38' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   PEAK++    FIB 50    FIB 62    LOW++

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Fibonacci 50% Line (FIB 50)

The Fibonacci 50% Line (hereafter, referred to as 'FIB 50') is one of three Fibonacci Lines that are commonly apllied to a trend.   It represents 50% of an entire trend as measured from the trend's peak (PEAK++) to its low (LOW++).

Why do traders care?

  • When Price Is Falling:

    • 'FIB 50' tends to provide Support to a falling price.   It's where an uptrend, having pulled back, often regains its footing and remains valid.

    Broken Support, however, often means that buyers have lost control; and that it's a good idea to sell.

  • When Price Is Rising:

    • 'FIB 50' tends to provide Resistance to a rising price.

    Broken Resistance, however, is a sign that sellers have lost control; and that it's a good idea to either venture a purchase or add to an already established long position.

  • The Gathering of Support and Resistance:

    • 'FIB 50' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'FIB 50' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   PEAK++    FIB 38    FIB 62    LOW++

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Fibonacci 62% Line (FIB 62)

The Fibonacci 62% Line (hereafter, referred to as 'FIB 62') is one of three Fibonacci Lines that are commonly apllied to a trend.   It represents 62% of an entire trend as measured from the trend's peak (PEAK++) to its low (LOW++).

Why do traders care?

  • When Price Is Falling:

    • 'FIB 62' can provide Support to a falling price.   It's where an uptrend, being in jeopardy from broken Support at the Fibonacci 50% Line (FIB 50) has one last chance to redeem itself.

    Broken Support, however, is viewed as a Sell Signal that opens the door to a test of Support at the trend's low (LOW++), also known as a "test of bottom".

  • When Price Is Rising:

    • 'FIB 62' tends to provide Resistance to a rising price.

    Broken Resistance, however, is viewed as a Buy Signal that opens the door to a test of more important Resistance at the trend's Fibonacci 50% Line (FIB 50).

  • The Gathering of Support and Resistance:

    • 'FIB 62' will be more effective in providing either Support or Resistance when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'FIB 62' is not standing alone; but rather, that it is part of a stronger area of either Gathering Support or Gathering Resistance.


See Also:   PEAK++    FIB 38    FIB 50    LOW++

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Low of a Trend (LOW++)

The Low of a Trend (hereafter, referred to as 'LOW++'), is the lowest price to which sellers were able to press a stock before surrendering control to buyers.

Why do traders care?

  • 'LOW++' is the price at which sellers lost control to buyers.   It represents, therefore, Support to a falling price.

    Broken Support, however, is a sign that sellers are back in control; and that it's a good idea sell.

    'LOW++' is also used in combination with PEAK++ to calculate the three Fibonacci Lines (FIB 38, FIB 50 and FIB 62) that are commonly applied to a trend.

  • The Gathering of Support:

    • 'LOW++' will be more effective in providing Support when it's highlighted in blue on a Support & Resistance Table.   Blue highlighting means that 'LOW++' is not standing alone; but rather, that it is part of a stronger area of Gathering Support.


See Also:   PEAK++    FIB 38    FIB 50    FIB 62

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