Introduction to Technical Analysis: Support, Resistance, and Trend Lines

Ever looked at a stock chart and thought, “Should I buy now?”
Welcome to the world of technical analysis—where price patterns and simple lines can tell powerful stories.

It might seem overwhelming at first. All those candles, lines, and indicators… But once you understand the basics, you’ll start to see what the market is trying to whisper.

Let’s take your first step together.

1. What is Support?

Think of support as a price level where a stock tends to stop falling and bounces back up. It’s where buyers step in and say, “Okay, this looks cheap—I’ll buy.”

* Example: If a stock keeps falling to $50 and then rises again, $50 is a support level.

Keep in mind: If support breaks, the price could drop further. But if it holds, it might be the launchpad for the next upward move.

2. What is Resistance?

Resistance is the opposite of support. It’s where a stock struggles to move higher. Sellers step in and say, “That’s enough—I’m taking profits.”

* Example: If a stock repeatedly hits $80 and pulls back, $80 is a resistance level.

Bonus tip: When a resistance level is broken, it can become a new support level—this is often the start of a strong bullish trend.

3. Trend Lines: The Market’s Path

Prices don’t move in straight lines, but they often follow a direction—up, down, or sideways.

• Uptrend: Higher highs and higher lows (a bullish sign).
• Downtrend: Lower highs and lower lows (a caution signal).
• Sideways: Prices move in a range (often a waiting game).

* To draw a trend line, you connect two or more lows in an uptrend (or highs in a downtrend). Over time, trend lines help you visualize momentum and potential reversals.

Why Does This Matter?

Because technical analysis isn’t about predicting the future—it’s about recognizing what’s happening right now and using it to make smarter decisions.

• Near support? Could be a buying opportunity.
• Hitting resistance? Maybe time to take profits.
• Breaking the trend? Might be time to reconsider your position.

Final Thoughts

Technical analysis isn’t magic—and it won’t give you perfect answers. But it does give you clarity.

With time and practice, those confusing lines on a chart start to look more like a map. You begin to see where the market has been… and where it might want to go.

Because the best investors don’t just follow the price—they understand the story behind it.