Support and resistance are the foundation of technical analysis.
Almost every chart pattern, indicator, and strategy ultimately revolves around these two ideas:
Where do buyers step in?
Where do sellers take control?
If you understand support and resistance well, you can read charts with clarity instead of confusion.
What Is Support?
Support is a price level where demand is strong enough to stop prices from falling further.
At support:
- Buyers become active
- Selling pressure weakens
- Prices often bounce upward
📌 Support represents a price area, not a single exact line.
(Suggested image: Price falling and bouncing multiple times from the same zone)
What Is Resistance?
Resistance is a price level where supply is strong enough to stop prices from rising further.
At resistance:
- Sellers dominate
- Buying pressure weakens
- Prices often reverse downward
📌 Like support, resistance is also a zone, not a precise number.
(Suggested image: Price rising and getting rejected multiple times from the same zone)
Simple Market Psychology Behind Support & Resistance
Why do these levels work?
Example:
- A stock falls to ₹200 and bounces
- Traders remember ₹200 as “cheap”
- When price returns near ₹200:
- Buyers enter again
- Sellers hesitate
Similarly:
- A stock rises to ₹350 and reverses
- Traders remember ₹350 as “expensive”
- Selling pressure increases near that level
📌 Markets have memory — charts reflect collective human behavior.
Types of Support and Resistance
1️⃣ Horizontal Support & Resistance (Most Important)
These are levels where price has repeatedly reversed.
Characteristics:
- Easy to spot
- Works across all timeframes
- Used by beginners and professionals alike
(Suggested image: Horizontal lines drawn at repeated highs and lows)
2️⃣ Dynamic Support & Resistance (Trend-Based)
In trending markets, support and resistance move with price.
Examples:
- Rising trendline acting as support
- Falling trendline acting as resistance
- Moving averages acting as dynamic levels
(Suggested image: Uptrend with rising trendline acting as support)
📌 Dynamic levels are powerful during strong trends.
3️⃣ Psychological Levels
These are round numbers that attract attention.
Examples:
- ₹100, ₹500, ₹1000
- Nifty 20,000 / 22,000
Why they matter:
- Humans think in round numbers
- Orders cluster around these levels
📌 Psychological levels often act as temporary support or resistance.
Role Reversal: Support Turns Into Resistance (and Vice Versa)
One of the most important concepts in trading.
- When support breaks → it often becomes resistance
- When resistance breaks → it often becomes support
(Suggested image: Broken support level acting as resistance after breakdown)
📌 This happens because trapped traders change their behavior.
How to Draw Support and Resistance Correctly
✔ Use zones, not thin lines ✔ Focus on multiple touches ✔ Start with higher timeframes (daily/weekly) ✔ Adjust levels as price evolves
❌ Avoid forcing levels ❌ Avoid drawing too many lines ❌ Avoid focusing only on intraday noise
Support & Resistance Across Timeframes
- Higher timeframe levels → stronger impact
- Lower timeframe levels → short-term reactions
Example:
- Weekly support overrides 5-minute resistance
📌 Always respect the higher timeframe first.
Common Beginner Mistakes
❌ Treating levels as exact prices ❌ Drawing too many support/resistance lines ❌ Ignoring trend direction ❌ Expecting price to reverse every time
✔ Think in zones ✔ Combine with trend analysis ✔ Wait for confirmation
Advanced Insight (For Intermediate & Experts)
Professionals focus on:
- Location of price relative to major levels
- Strength of rejection (wick vs body)
- Volume behavior near levels
- Time spent near support/resistance
📌 Strong breakouts usually come after consolidation near key levels.
Key Takeaways from Lesson 5
- Support = buying interest zone
- Resistance = selling interest zone
- Levels are zones, not exact lines
- Broken levels often change roles
- Context and timeframe matter
What’s Next?
Now that you understand key price levels, the next step is timing entries and exits.
👉 Proceed to Lesson 6 – Chart Patterns (Basics)
👈 Go Back to Technical Analysis Basics