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3 Ways to Identify Support and Resistance – 5 Chart Examples
Senior Analyst Jeffrey Kennedy shares charts of ALCOA Inc, Gold, Wheat and Akamai Technologies.

By Jill Noble
Wed, 13 Mar 2013 13:45:00 ET
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Today's lesson considers three ways to identify price support and resistance in the markets you trade.

1) Previous highs and lows
2) Trendline support
3) Fibonacci Ratios
 
These examples are adapted from Jeffrey Kennedy’s March 4 episode of Elliott Wave Junctures. You can access this entire video lesson and other exciting new episodes when you subscribe today, risk free>> ).
 
1) Uptrends terminate at resistance while downtrends terminate at support. Previous highs and lows often act as resistance and support.
 
In ALCOA Inc (AA), the September 2012 selloff found support near the previous July 2012 low.
 

 
More recently in AA, the February peak occurred following a test of resistance at the January peak at $9.33. 
 
2) Trendlines offer resistance and support for prices.
 
The 2008 advance in Gold found support numerous times near the trendline that connected the lows of the move, as you can see below:
 
 
Conversely, the trendline connecting the highs of Wheat’s decline (WHA) since November 2012 provided resistance for countertrend price action.
 
 
 
3) Fibonacci ratios also identify resistance and support. As Elliotticians, we often look at retracements, the most common being .382, .500 and .618. In Akamai Tech, Fibonacci support ignited the July and November 2012 rallies:
 
 
In the same chart you can also notice how Fibonacci resistance in AKAM halted the July 2012 and February advances.
 
 
From straightforward examples like these 5 charts, to detailed instruction across markets and time frames, Jeffrey Kennedy's Elliott Wave Junctures service equips you to make more confident forecasts -- with 3 to 5 video-based trading lessons each week.
 
Learn How to Apply Some of the Most Powerful Technical Methods to Your Trading
 
If you're like most traders, you may have some familiarity with technical analysis. Methods and indicators such as Elliott wave, trendlines and Fibonacci are widely used among successful market analysts and traders.
 
But do you know how to combine these powerful technical methods to your trading to improve your confidence in your own market analysis?
 
Insights like this can help you master many critical aspects to spot -- and act on -- opportunities in the markets you trade.
 


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