Support and resistance are the most basic elements of technical analysis. Level trading, or channel trading, is based on these two elements. Stock price moves up and down, every day, that’s what it does. What people don’t realize is the stocks “bounce” and “fall” because of these levels.

• When price is falling, it will fall until it finds support.

• When price is rising, it will continue up until it hits resistance.

Click the image to get an example. Note, each candle is one minute.