So as Marc explains in this week's video, changes in support or resistance can indicate changes in shareholder psychology. If a stock dips below its support value or trend line, it shows that investors are wary and the stock is likely to fall further. Here's an example from Marc's latest episode... If a stock leaps above its resistance value or trend line, it has what is known as a "breakout." This can indicate that the stock is ready for a new run higher. Investor psychology can change for a variety of reasons. For long-term investors who track fundamentals, changes may be noteworthy because they represent a shift in earnings or another kind of catalyst. But for short-term traders who base their strategy on stock charts, "Why?" is less important than "What next?" For example, a support trend line that moves upward can indicate that a stock is heading to new highs. Meanwhile, a resistance trend line that trails lower can be a bad omen. Of course, no technique can perfectly predict what a stock will do next. A stock that breaks its resistance level can drop, and vice versa. But in this week's edition of State of the Market, Marc reveals how you can use stock charts to identify these trends - and increase your profits and lower your risk in the process. Click here to view his latest episode now. Good investing, Mable P.S. Got the hang of support and resistance? Then you've got the hang of "Power Channels," Marc's favorite technical indicator for building profits and slashing risk. Click here now to learn how you can use Power Channels to profit in 2021. |
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