RESISTANCE OR SUPPLY ZONE

Resistance is the level at which supply is strong enough to stop the stock from moving higher, due to which that stock is unable to go up, or when it reaches the resistance level, investors start selling, due to which the stock falls. And that stock is unable to cross the resistance level, which is called resistance zone.

                                                                             

              As soon as the stock reaches the resistance zone, the supply of that stock increases and selling starts in the stock, which is also called supply zone in the language of stock market. The resistance zone is always above the current market price (CMP) of the stock.
You can see in this below chart.

               The support level is also called the Demand zone. The time frame may be changed to a 5-minute time frame for Intraday, a 15-minute and 1-hour time frame for swing trade & 1-Day time frame for short-term & long-term delivery.

 

             In above chart, you can see market was a uptrend and shooting star candle  formed at top level & Reversal for downtrend. Again market bounce back from the support zone and reached near resistance or supply zone and 2nd time also faced resistance. Unable to sustain at top level and same happed market fallen from the Resistance zone.

(Before reading the chart pattern, read the candlestick pattern once so that the chart pattern can be understood clearly)

What should be stoploss & target in support zone?

            For better profit, you have to wait till resistance level, if market goining up from the bottom level or support level, If you have missed entry for long position. In top level or previous Resistance or supply zone, bearish candlestick should be formed for better confirmation for short selling position in option selling or Stock or index future short selling. Once bearish candlestick pattern formed at resistance level, you have to enter below next bearish candle (Entry price for short selling position) & Stoploss should be above Resistance level. For target, you can set target  previous low or support level for short term trading and in Intraday you can take profit as per market condition.