Before you draw support and resistance, you need to understand the logic behind it.
Let's assume you are in a room with a tennis ball. Now, if you throw the ball upwards, what will happen? It will touch the sealing and come down to the floor. So if there was no sealing, the ball would have gone up. Here also, in charts where there is resistance, it works as a sealing, and where there is support, it works as a floor. Once you break the sealing or floor, the ball will travel to the next destination till the next floor. So drawing support and resistance is very important as you can know where the stock can travel or fall.
I draw my support and resistance based on the supply and demand zone. You can easily identify them. I will show you how it is done!
- Open the scrip, and select the time frame of 15 mins.
- Zoom out a little bit and try to identify the market trend.
- Try to find out from where the markets are reversing.
I am attaching a image for more clarity.
Here, 18329 acts as a resistance because when ever the market is reaching to that level, it is falling down till 18258 level that is acting as a support. Now you can draw multiple resistance and support line for your reference. I have drawn one in 18210 because i can see that the market is falling then till where the market falls.
Now if you find this helpful, can I get a like to this answer?