On October 8, 2010, I wrote on the reasons for my liking the concept of ‘Support and Resistance’. I also mentioned how support and resistance can reverse their roles. I want to give a few live examples of such reversal from the Indian Stock Market.
- On October 8, 2010, the share of Reliance Communications is hovering around Rs.180, which was resistance established on April 16, 2010, in the weekly chart. Once this level is decisively crossed, 180 will act as support. Of course, Reliance Communications will face one more resistance around Rs. 200, the level established on July 2, 2010.
- ICICI bank decisively crossed Rs.1,000, the resistance level established in the first week of April 2010 in the weekly charts. On October 8, 2010, the share price of ICICI bank was around Rs.1125. Should the price of ICICI bank decline Rs.1,000 will act as the support. (I will not even wait till Rs.1,000 since if it goes below Rs.1,100, I will sell it, since it is the level of Parabolic SAR).
- On May 21, 2010, TATA Steel decisively broke the support level of Rs.550 established in the weekly chart in the second week of February 2010. The price of TATA Steel bounced back after hitting Rs.450. On its way up, the previous support level of Rs.550, acted as resistance for nearly seven weeks. (Current price as on October 8, 2010 is Rs.626)
We will try and give you more examples in future also! In the mean while, feel free to share your observations.
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