Support / Resistance

Purpose: Identify potential price objectives.

This study is calculated by totaling up the total number of closing (or last) prices contained inside a specified price band. The length of a given bar is the percentage of the number of closes in the price band compared to the number of the closes in the band that had the greatest number of closing prices.

Longer horizontal bands represent prices where a greater number of closes or higher trading volume occurred. This is a very quick and easy way to identify historic areas of consolidation which could be stopping points in future price moves. The concept used with this study is that those areas where trade was concentrated in the past will offer support and resistance to future price moves.