TheTechnicalTake.com Trading Levels

7/23/2008

Using the concept of Price Structure Analysis�, key levels of support and resistance are easily identified, and from this information, daily trading levels are generated for the major stock market indices.

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As can be seen in the weekly price graph at the right, significant up thrusts (parallel red dots) or down thrusts (parallel block dots) serve as important areas or zones of support and resistance. Up thrusts initially act as resistance (point 1), but as prices close above this level, it will then act as support (point 2). Similarly, down thrusts will initially act as support, but will also serve as resistance once price closes below these levels (point3). Point 4 is a significant down thrust that served as resistance for over a year. It stopped the up thrust at point 1, but once this area was cleared, it led to the mini bull market of 2003. Utilizing Price Structure Analysis� to determine support and resistance works on both daily and weekly charts.

Key levels on both the S&P 500 and NASDAQ markets are updated daily on the sight, and depending upon the investing back drop, these make for ideal entry and exit points.

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