All of the tools used by the chartist—support and resistance levels, price patterns, moving averages, trendlines, etc.—have the sole purpose of helping to measure the trend of the market for the purpose of participating in that trend.
Figure 4.1c Example of a sideways trend with horizontal peaks and troughs. This type of market is often referred to as “trendless.” Figure 4.3a Shows rising support and resistance levels in uptrend.
Usually a support level is identified beforehand by a previous reaction low. In Figure 4.3a, points 2 and 4 represent support levels in an uptrend. (See Figures 4.3a and b.) Resistance is the opposite of support and represents a price ...
support levels which are usually previous reaction lows. Points 1 and 3 are resistance levels, usually marked by previous peaks. In an uptrend, the resistance levels represent pauses in that uptrend and are usually exceeded at some ...