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Support and Resistance Levels
Stocks are often limited in their movement when they encounter support and resistance levels. Support and resistance form at areas of excessive demand (buyers providing a support level) or supply (sellers providing a resistance level). Once support or resistance levels are penetrated or broken, price is once again free to move into new relative high or new relative low territory.
Support â€“ Stock Support
Support in a stock forms at an area where prices are limited in their ability to move lower due to the presence of buyers at lower prices. Support levels sometimes occur by themselves, while other times they are depicted with horizontal trend lines in chart patterns such as a triple bottom pattern. When support is broken to the downside, a stock is free to move lower due to the absence of buyers and demand.
Resistance â€“ Stock Resistance
Resistance in a stock forms at an area where prices are limited in their ability to move higher due to the presence of sellers at higher prices. Resistance levels sometimes occur by themselves, while other times they are depicted with horizontal trend lines in chart patterns such as a triple top pattern. When resistance is broken to the upside, a stock is free to move higher due to the absence of sellers and supply.
Same theory is with indices.
Analysis on Basis of F&O
4800 Level in Nifty is going to provide a good Support as there are large NO OF PUT open interest on this level.But as happened in past Nifty may breach these levels again to trigger stop losses of Bulls
Corresponding levels in Sensex to watch is 15990
there is Strong Call open interest at 4900 and 5000 Nifty levels,So these will offer first resistance
Sensex will Face resistance near 16600 levels
Technical Analysis :
50 DMA average of nifty is near 5000-5100 Zone so this will be the Zone of real Resistance.Sensex Will Face Resistance in region of 17100-17200
Nifty RSI is 37.36 Which indicates oversold Condititions
CCI is -143 again oversold conditions
Resistance & Support levels changes every day. So use technical Analysis Software to keep yourself updated.
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