This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
If the below chart applied to an equity, you would be in a position to identify levels of ‘Support’ and ‘Resistance’. So long as these levels remain unbroken, you could assume that shares will continue to trade within this range, or ‘channel.’
Click on the image to enlarge
Source: IT Finance
If one of these levels is broken, you would then be in a position to look to the next higher/lower level (usually a significant historic high or low) as the next level of potential resistance/support. The breakout level would likely reverse its prior role (support becomes resistance and vice versa) for any subsequent rally/declines.
Click on the image to enlarge
Source: IT Finance
Monitoring support and resistance in this stock can help you identify optimal entry and exit points. Of course, support and resistance levels reflect sentiment based on all publicly available information about the stock. Be aware – any new corporate action, corporate news (e.g. oil find, board changes) or takeover action may drive the price out beyond established support and resistance.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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