Support and Resistance Lines
By drawing horizontal lines across adjacent tops and bottoms of a security's price chart, one can identify a consolidation phase or sideways trend.
A support line demonstrates buyers support when the price is above it whereas resistance (sellers) when prices are below a resistance line.
Once the support/resistance line is penetrated, the expectation is for the price to snapback towards the line just penetrated. The price should resume a movement away from the line thereafter.
The longer the price of a security is turned back by either a support or resistance line, the stronger the lines become. However, when a breakout happens, either way, it normally becomes quite a strong move.
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