SUPPORT &

RESISTANCE
STRATEGY
What are Support
& Resistance
▪ Support and resistance are two foundational concepts in
Technical Analysis.

▪ Understanding what these terms mean and their practical

application is essential to correctly reading price charts.

▪ Prices move because of supply and demand. When demand is

greater than supply, prices rise.

▪ When supply is greater than demand, prices fall. Sometimes, prices

will move sideways as both supply and demand are in equilibrium.

▪ Like many concepts in technical analysis, the explanation and

rationale behind technical concepts are relatively easy, but mastery
in their application often takes years of practice.
What is Support?
▪ In downtrend prices fall because there is an excess of
supply over demand. The lower prices go, the more
attractive prices become to those waiting on the side-lines
to buy the shares.

▪ At some level, demand that would have been slowly

increasing will rise to the level where it matches supply. At
this point, prices will stop falling. This is support.
What is Resistance?
▪ Resistance is the opposite of support. Prices move up because
there is more demand than supply. As prices move higher, there
will come a point when selling will overwhelm the desire to buy.
This happens for a variety of reasons. It could be that traders
have determined that prices are too high or have met their
target.

▪ It could be the reluctance of buyers to initiate new positions at

such rich valuations. It could be for any other number of
reasons. But a technician will clearly see on a price chart a level
at which supply begins to overwhelm demand. This is
resistance. Like support, it can be a level or a zone.
Why is Trading Support and Resistance
Difficult but Rewarding?
▪ Trading support and resistances is difficult because the entire world
sees them and trades them. However, they still hold good as zones
where price reacts.

▪ Over the time traders who have been able to understand these as
zones and not just one price point has been profitable in the long run.

▪ Support and resistances are used as stops for many traders who go
long or short.

▪ Big players use these price points and take the market higher or
lower so the weak hands exit due to a small spike in price at these
levels.

▪ The market continues its journey after hitting these stop losses.
How to Make
The Most of
Support & Resistance
Zones?
▪ Chose a larger Timeframe to mark support and
Resistance levels – 1 Day Timeframe.

▪ Mark support and resistance zones in smaller

Timeframe – 15 minutes.
How to Trade with
Short Trade
Trending Oi

SHORT TRADE

▪ Initiate short trade only when price retraces below these resistance
zones. It takes a great deal of determination and conviction for
sellers to halt the strong momentum and move price away from it.

▪ Once the sellers have shown conviction join the momentum after
the price has retraced from resistance zone.

▪ Short trade with conviction when Call OI increases drastically and

Put OI covering – See Trending OI to trade with conviction from
Resistance zones.
Trending Oi
How to Trade with
Long Trade
Trending Oi

LONG TRADE

▪ Initiate long trade only when price pulls back above these support
zones. It takes a great deal of determination and conviction for
buyers to halt the strong momentum and move price away from it.

▪ Once the buyers have shown conviction join the momentum after
the price has pulled away from support zone.
Trending Oi
Thank You