Let us see figure below
Under a point of support while above the resistance point. There are several ways to determine the point of support or resistance include using pivot, Bollinger bands, fibonanci series, and others.
What happens if the movement has reached a point of resistance or support point? Most prices will turn around. If prices rise then hit a resistance, then the price will be turned down. If the price falls and reaches the point of support, then the price will go up.
Let's look at the picture below.
Other interesting tidbits about support and resistance:
- When the price passes through resistance, that resistance could potentially become support.
- The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is.
- When a support or resistance level breaks, the strength of the follow-through move depends on how strongly the broken support or resistance had been holding.
Click this link to determine support and resistance is the pivot point
Click this Link to determine Support and resistance with bollinger bands
