Support Vs Resistance Study

Support is basically a zone or level from which a stock bounce back and tries not to go beyond that level.

There could be different reasons for the same and generally it is said that buyers become active at this level and a significant buying supports the stock from going below to this level.  As buyers finds the price attractive at this level and believe that the stock at its best position.

Resistance is a level or zone from which, stock starts loosing its value or starts a downtrend.

Stock reaches at this level and starts coming back towards support again, as sellers are active this area and found the stock costly or overvalued. Hence traders starts selling and resulting of same the stock shows downtrend.

Support and Resistance zones are basically used for doing positional trading. There are different stocks, which are used to be in a range and stay there for long periods even for years.

For e.g. ITC is a perfect positional tading stock and stay in the range of Rs. 270.00 to Rs. 310.00. However there are different stocks which remain in the same zone even for very short period of 15 days or one month.

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