# How I Plot the Support and Resistance Levels of a Stock

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I won’t dwell that much on the etymological, wikipedia-esque or investopedia-esque description of support and resistance, per se, in this article. Just to give you a concise idea on what support and resistance levels are, let me define them for you.

Support is the price level where it is psychologically believed that the interest to buy is strong enough to stop investors from selling further. On the other hand, resistance is the price level where it is psychologically believed that the interest to sell is strong enough to stop investors from buying further. Don’t worry because I will give you an actual and a graphical representation of support and resistance levels below.

In a simpler discussion, if the stock’s price declines each time it hits a certain price level, you can consider that as the resistance level. If the same way, if the stock’s price rebounds every time it hits a certain price level, you can consider that as the support level.

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Now, let’s go back to my original intent of showing my 3-step rule when identifying and plotting the resistance levels of a stock. Keep in mind that every technical analyst has his or her own style when plotting the support and resistance levels of a stock. So don’t take this article as though I’m implying that this is the only way, okay?Â I follow a multi-timeframe approach when plotting support and resistance levels. Let me demonstrate that to you by using COSCO’s chart.

Step 1: Plot the Monthly Chart. Draw the support and resistance level.

The blackÂ horizontal lines are the support and resistance levels I’ve added after plotting the MonthlyÂ Chart.

Step 2: Plot the Weekly Chart. Draw the support and resistance level.

The orange horizontal lines are the support and resistance levels I’ve added after plotting the Weekly Chart.

Step 3: Plot the DailyÂ Chart. Draw the support and resistance level.

The purpleÂ horizontal lines are the support and resistance levels I’ve added after plotting the DailyÂ Chart.

There you go! Now you have a multi-timeframe approach when plotting the support and resistance levels of a stock.

By the way, it’s fine even if you’ll use black horizontal lines all throughout. I used three different colors so you can identify the new lines I plotted for each timeframe.Â This approach encouragesÂ me to reviewÂ the historical behavior of the stock on a monthly and weekly basis, too.

I suggest you study how to plot support and resistance levels if you’re a beginner. Never trade a stock unless and until you know how to plot support and resistance levels. I’ve already spoken with thousands of people who are trading and investing in the stock market. Many of them, especially those who have lost lots of money trading, do not know how to plot support and resistance levels.

The support and resistance levels of a stock areÂ a sneak preview of what traders were thinking. If you see that the stock’s price made several unsuccessful attempts to break a resistance level in the past, that is already a clue where you should put your target selling price. In the same way, if you see that the stock’s price bounced every time it hits aÂ certain support level each time it hits that level, that should give you an idea where to buy.

If you’ll jump right away intoÂ buying stocks immediately after getting your online stockbroker’s account approved, then, you’re just setting yourself up for a frustrating experience trading in the Philippine stock market. Do yourself a favor by going through the learning process that you need to pass.

### Jaycee De Guzman

I have helped thousands of Filipinos trade independently and invest profitably through the Equilyst Analytics, Inc. I have also helped hundreds of SMEs and Fortune 500 companies build and boost their online presence through iPresence Digital Marketing, Inc. Read my About Me page.

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1. Good am Sir Jaycee, ask kolang kung ano yung EMA code sa Col Charting.yung SMA na plot ko na kagabi yung tinuro mo. Wala kasi ako makita na exponential MA, sa tools ng Col baka me ibang name siya.tnx for reply

• Hi, Ernie. Thank you for visiting my website.

While I neither represent nor provide technical support on behalf of any broker, I will try to help you regarding your question.

Here are the steps on how to find the different types of EMAs on COL’s platform.

1. Click STUDIES.
2. Click Moving Averages.

3. Click Exponential on the TYPE dropdown box.

I hope this helps.

Note: COL Financial, you owe me one on this. ðŸ™‚ Send me a representative of yours. I have thousands of clients and site visitors who are users of your platform.

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