Does Support and Resistance Work?

adityasaraf007

Well-Known Member
#1
First of all, let me make is very clear that this thread is only for educational purposes and I am presently not trading them. The main purpose of this thread is to develop confidence in our Analysis and be able to use the most basic form of Technical Analysis to the best effect.

Whats Support and Resistance? For me, any place on a chart where some major trading activity begins or halts is a Support/Resistance. I would be using Horizontal Lines, Trend Lines and Moving Averages to find out these Decision Points.

Lets observe Support and Resistance for a few months from now on. Here is the 47-minute chart of Minifty as of 3rd June 2011. I know you would be thinking who the hell in the world uses 47-minute chart, but its just for the sake of consistency in data. As we have a total of 375 minutes in a Trading Session, so total of 8 47-minute candles represent a Trading Session.



I have marked major Support/Resistance lines in Red and the minor ones in Yellow.

Now, take a look at last week's Trading Sessions represented by the 5-minute Chart and see how any major activity begins or halts at these Lines most of the times.



I would be regularly posting the Charts or Levels for Nifty and some of the most actively traded stocks. As mentioned earlier, this is just for the purpose of developing confidence in our Analysis. You would also find my charts and thoughts to be inspired by a lot of senior members of this very forum including Saint Sir, Raghav ji, ST Sir, Savant ji, Raunak ji, SH Sir, AW Sir, PT ji and many more members.

And yes, others are also welcome to post there charts, comments and share their experiences.

With regards,
Aditya
 

adityasaraf007

Well-Known Member
#2
Here is the 5-min Chart of Minifty for June 06 and June 07 (Realtime):

1. On 6th June, Price takes the support around the Yellow Line at 5480.

2. Price breaches the resistance of 5520 but required volumes for this action.

3. On 7th June, Price takes the support around 5520 and moves higher.



With Regards,
Aditya
 

adityasaraf007

Well-Known Member
#6
Here is the 5-min Chart of Minifty for June 07 and June 08:

4. Price faces resistance around 5575. The Yellow Line around that level is drawn at the end of 7th June.

5. Price takes support around 5520 after the fall with more than average volumes. Consolidates around this area, however volume is too low. At the end of the day, bounces off from these levels.



Today was an NR4 and IB day. So expect some fireworks within 2 trading sessions.....

Levels to watch:
Todays High: 5560 and Todays Low: 5510
 

linkon7

Well-Known Member
#8
One advice...!

Draw support and resistance on 30 min tf and then use those levels on a smaller tf of 3 min or 5 min for ur buy / sell decision. This has, and always will, work like a charm.

One higher tf u get the bigger picture, on a smaller tf u get the details...!
 

adityasaraf007

Well-Known Member
#9
Yes LInkon Sir, that's what I plan to do....

The red ones are the visual pivots on 47-min TF, whereas the yellow ones are multiple resistance and support lines....

Thanks for visiting this thread and please keep on guiding us....

PS: I always found your posts to go above my head....

With regards,
Aditya