S / R Levels - Jan 20 - 24
The support levels identified last week were accurately reached for numerous securities, demonstrating their validity
Support and resistance levels are horizontal lines on a price chart that represent areas where the price of an asset has historically found support or resistance. These levels can be used to identify potential buying and selling opportunities, as well as to set stop-loss orders.
Support Levels
A support level is a price level at which the price of an asset can find support. This means that the price can bounce off of this level and move higher. Support levels can be identified by looking for areas where the price has consolidated or reversed direction; or they can be calculated in advance as this publication presents.
Resistance Levels
A resistance level is a price level at which the price of an asset can bounce off of this level and move lower. Resistance levels can be identified by looking for areas where the price has consolidated or reversed direction; or they can be calculated in advance as this publication presents.
Using Support and Resistance Levels
Support and resistance levels can be used in a number of ways to trade stocks and other assets. For example, you can buy a stock when it breaks above a resistance level and sell it when it breaks below a support level. You can also use support and resistance levels as a reference (not exactly at the S/R level) to set stop-loss orders. A stop-loss order is an order to sell a stock if it falls below a certain price.
Securities Analyzed in this Edition
Every Friday, three support, and three resistance levels are published for 35 securities, including a seventh line which is the central level, a key zone where price has proven to provide signals of bullish or bearish price action. The Securities are:
SPX NDX DJI ES=F NQ=F SPY QQQ IWM DIA SMH TLT TQQQ SQQQ UPRO SPXS UDOW SDOW URTY SRTY NVDA META MSFT AMZN GOOG AAPL TSLA NFLX COST MSTR PLTR AMD GLD SLV BITCOIN ETHEREUM. If you trade some of those securities this publication is for you.
Examples with Two Securities
AMD
Bullish continuation if this key level continues as support: $119.5
Immediate target for bullish continuation: $124.7
Potential bearish reversal target if the key level is breached: $116.3
NFLX
Bullish continuation if this key level continues as support: $850.2
The next upside target is: $876.9
Potential bearish reversal target if the key level is breached: $831.4
This edition now includes definitions likes the ones above for SPY, QQQ, DIA, and leveraged funds, offering a clearer understanding of the presented data.
When price action decisively breaks through a support or resistance (S/R) level, the next significant S/R level becomes the likely target.
Accurately interpreting price action is crucial for effective analysis, which is provided in the Weekly Compass every Saturday.
Given the increased volatility during extended trading hours, monitoring price action in futures has become essential.
ES=F