A breakdown of the process:
Identify Previous Price Levels:
Look for areas on the chart where the price repeatedly bounced off a certain level (support) or struggled to break through a certain level (resistance).
Mark these levels on the chart with horizontal lines.
Draw Trendlines:
Connect a series of higher lows to identify an upward trendline (acting as support).
Connect a series of lower highs to identify a downward trendline (acting as resistance).
Use Moving Averages:
Calculate moving averages (such as the 20-day, 50-day, or 200-day) and observe how the price interacts with them.
Moving averages can often act as dynamic support or resistance levels.
Apply Technical Indicators:
Consider using indicators like Fibonacci retracements, pivot points, or Bollinger Bands to help identify potential support and resistance zones.
Specific to the IRFC chart you provided:
Visible Support Levels:
Approximately 160.00
Approximately 140.00
Potentially around 120.00 (based on previous lows)
Visible Resistance Levels:
180.00 (current price level)
Potentially around 200.00 (based on previous highs)
Key Points to Remember:
Support and resistance levels are not exact science and can change over time.
It's important to use multiple methods to confirm potential levels and consider the overall market context.
Price can break through support or resistance levels, so be prepared to adjust your analysis accordingly.
Consider using volume and other technical indicators to strengthen your analysis.
Additional Tips:
Use longer-term charts (e.g., weekly or monthly) to identify major support and resistance levels.
Look for areas where multiple levels of support or resistance converge for potentially stronger levels.
Pay attention to how the price reacts near these levels, as it can provide clues about their strength.
Identify Previous Price Levels:
Look for areas on the chart where the price repeatedly bounced off a certain level (support) or struggled to break through a certain level (resistance).
Mark these levels on the chart with horizontal lines.
Draw Trendlines:
Connect a series of higher lows to identify an upward trendline (acting as support).
Connect a series of lower highs to identify a downward trendline (acting as resistance).
Use Moving Averages:
Calculate moving averages (such as the 20-day, 50-day, or 200-day) and observe how the price interacts with them.
Moving averages can often act as dynamic support or resistance levels.
Apply Technical Indicators:
Consider using indicators like Fibonacci retracements, pivot points, or Bollinger Bands to help identify potential support and resistance zones.
Specific to the IRFC chart you provided:
Visible Support Levels:
Approximately 160.00
Approximately 140.00
Potentially around 120.00 (based on previous lows)
Visible Resistance Levels:
180.00 (current price level)
Potentially around 200.00 (based on previous highs)
Key Points to Remember:
Support and resistance levels are not exact science and can change over time.
It's important to use multiple methods to confirm potential levels and consider the overall market context.
Price can break through support or resistance levels, so be prepared to adjust your analysis accordingly.
Consider using volume and other technical indicators to strengthen your analysis.
Additional Tips:
Use longer-term charts (e.g., weekly or monthly) to identify major support and resistance levels.
Look for areas where multiple levels of support or resistance converge for potentially stronger levels.
Pay attention to how the price reacts near these levels, as it can provide clues about their strength.