|  SEP 1991

Guidelines With Support And Resistance by Richard L. Evans

Guidelines With Support And Resistance by Richard L. Evans Given the explosive growth of the financial markets, with all the derivative products and the increased complexity of trading strategies, all aided by the evolution of computers, some exotic forms of technical analysis have emerged. A perusal of some of the recent features of STOCKS & COMMODITIES is enough to overwhelm many an average investor. However, one of the oldest forms of technical analysis, support and resistance, can still put the individual investor on the same playing field with the institutional investor when it involves old-fashioned stock picking. The rules are as effective today as they ever have been. Support and resistance can generally be equated with demand/supply. Support is where enough demand is forthcoming to either stop a decline in a stock and/or start an advance; resistance is when enough supply enters the market to cause the stock to either stop rising and/or start falling. This definition may not seem too profound, but it shouldn't be; support and resistance is not an exotic technical theory, but one based on day-to-day trading itself, the nuts and bolts of market activity.

by Richard L. Evans