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SUPPORT AND
RESISTANCE
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Watching
support and resistance is a time tested rule of thumb
when reading a price chart.
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When you look at a price chart,
it is easy to see areas of price support and price
resistance.
Support is when the price
of a commodity future hits a low and doesn't seem to
want to go any lower.
Resistance is when the
price of a commodity future hits a high and doesn't seem
to want to go any higher.
While looking back on a chart,
it's easy to see the support and resistance, as seen in
the chart below. But predicting the exact points
can be a little harder as they aren't always exact.
Prices sometimes exceed the apparent points before
correcting, and the support and resistance points don't
always hold.
It helps to take time to watch
how the commodity future reacts to support and
resistance, and it also helps to watch other indicators
while predicting the support and resistance points.
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