Calculating Support & Resistance

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Steps in Calculation of Support & Resistance

Step 1 Find out 52 Week High & Low for the stock

Let's suppose,

52 Week High = 1000

52 Week Low = 500

Step 2 Calculate difference between 52 Week High & Low

We have,

Difference = 500

Step 3 Divide the difference by 8

We have,

Result = 63

Step 4 Keep on adding "Step 3" figure (result) in 52 Week Low price till you reach 52 Week High to find out support & resistance for any stock

Here we go,

52 Week Low 500

563

625

688

750

813

875

938

52 Week High 1000

Step 5 Find out 8 Brackets which states Support & Resistance.

Bracket 1: 500 to 563,

Bracket 2: 563 to 625,

Bracket 3: 625 to 688,

Bracket 4: 688 to 750,

Bracket 5: 750 to 813,

Bracket 6: 813 to 875,

Bracket 7: 875 to 938,

Bracket 8: 938 to 1000

Step 6 Check Support & Resistance of Stock

Let's suppose,

CMP (Market Price) for Stock is 700

Try to find out the bracket in which CMP lies. It is evident that it is between 688 & 750. So the support for this stock would be 688 (lowest figure in bracket) which means that you should become cautious or should sell off your stock if it breaches 688 otherwise your stock may slip further. Resistance for this stock is at 750 (highest figure in the bracket) which mean that if CMP has crossed then there is probability that this stock will go up or gain upward momentum.

@ CMP (stock price)of 700

Support is 688 and

Resistance is 750