✨ Capital Market Chronicles – Episode 232: TECHNICAL ANALYSIS – SUPPORT & RESISTANCE (Part IV)
🛠️“Tools, Volume Signals & Classic Mistakes Traders Make!” 📊😂
Let’s jump in!
🛠️ TOOLS TO IDENTIFY SUPPORT & RESISTANCE
You don’t have to be Sherlock Holmes to spot S&R levels.
You just need the right tools. 🕵️♂️🔍
Here are the most commonly used ones:
1️⃣ Horizontal Lines
These are the simplest tools.
Just mark the points where:
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price repeatedly bounces (support)
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price repeatedly gets rejected (resistance)
It’s like marking “favourite spots” on the chart.
Very basic, very effective. 😄
2️⃣ Trendlines
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Draw upward sloping lines in uptrends (dynamic support)
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Draw downward sloping lines in downtrends (dynamic resistance)
🚶♂️Trendlines show how price naturally moves over time —like a staircase going up or down. 📈📉
3️⃣ Moving Averages (50/100/200)
Moving averages act as automatic dynamic support & resistance.
Examples:
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In an uptrend, prices often bounce from the 50-day MA
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In a downtrend, prices get rejected at the 200-day MA
The 200-day is like the market’s "Lakshman Rekha".
Break it — and drama starts. 😂🔥
4️⃣ Fibonacci Levels
The favourite tool of traders who say things like:
“Bro, 61.8% retracement aayega, then breakout!” 🤓📐
Fibonacci helps identify pullback zones where price is likely to turn.
5️⃣ Price Zones, Not Lines
S&R is often a zone, not a single precise rupee level.
Think of it like this: Price doesn’t care about your exact line.
It dances in an area. 💃📊
📊 THE POWER OF VOLUME IN SUPPORT & RESISTANCE
Volume tells you whether a breakout is real…
or just acting like a breakout. 🎭😂
⭐ 1. High Volume = Real Strength
If price breaks support or resistance with high volume, it usually means:
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Institutions are involved
-
Trend may continue
-
Breakout is strong
It’s like the difference between a whisper and a loudspeaker. 📢
⭐ 2. Low Volume = Fake Breakouts
If a breakout happens on low volume, it often fails.
Traders call this:
-
False breakout
-
Bull trap
-
Bear trap
It’s like a paper tiger — looks scary but tears easily. 🐯🧻
⭐ 3. Volume Spike Near Support/Resistance
Volume spikes near S&R mean a battle between buyers and sellers.
Whoever wins decides the next move.
If buyers win → bounce
If sellers win → breakdown
Simple. Beautiful. Emotional. 😂
⚠️ COMMON MISTAKES TRADERS MAKE
Avoid these, and you’re already ahead of half the market. 😄
❌ 1. Treating S&R as exact numbers
Nope. They’re zones, not surgical lines.
❌ 2. Ignoring volume completely
Never trust a breakout without volume. Even your friends are more reliable. 😜
❌ 3. Drawing too many lines
Some traders turn their charts into spiderwebs. 🕸️😂 Keep it clean and simple.
❌ 4. Expecting every level to hold
Support can break.
Resistance can break.
Life goes on. Markets move. 😄
❌ 5. Emotional Trading
Just because you “feel” it will bounce… doesn’t mean it will.
Price doesn’t care about feelings. 😆
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