When commodity prices in the market reach a certain level, they often no longer continue to rise or fall. It seems that there is a resistance line at this price that blocks or supports commodity prices, which we call respectively. are resistance lines and support lines. The so-called resistance line means that when the price of a commodity rises to a certain height, there is a large supply of selling orders or weak buying orders, which hinders the continued rise of the commodity price. The support line refers to when the commodity price drops to a certain height, the buying momentum becomes strong and the selling momentum weakens, thus causing the commodity price to stop falling. From the perspective of supply and demand, "support" represents concentrated demand, while "resistance" represents concentrated supply, and changes in the supply and demand relationship in commodity prices. Resulting in restrictions on commodity price changes. Both resistance lines and support lines are important methods of graphic analysis. Generally, if the commodity price fluctuates up and down in a certain area, and the accumulated trading volume in this area is extremely large, then if the commodity price breaks through or falls below this area, it will naturally become a support line or resistance line. These prices that have had large trading volumes often change from resistance lines to support lines or from support lines to resistance lines: once the resistance line is crossed, it will become the support line for the next downtrend; and once the support line falls below , will become the resistance line for the next upward trend.

The principle and application of support lines:

On the K-line chart, as long as the lowest price appears multiple times in the same small range, a support is formed by connecting two identical lowest prices and extending them. Line, which vividly describes the imbalance of commodity prices in a certain price range, where demand is greater than supply. When the buying and selling price falls into this range, the seller is reluctant to sell due to the surge in buying sentiment, causing the commodity price to turn around and rise. Its inherent essence is: because this price range has repeatedly appeared in the previous stage, a large trading volume has accumulated. When the market moves closer to the support line from top to bottom, the seller's profit chips have been cleared, and there is no selling pressure in his hands. Chips; buyers hold the currency to take advantage of low prices, creating demand; those who are hesitant are already deeply entrenched, and it is not easy to liquidate their positions with locked chips. Therefore, supply is less than demand in this price range, which naturally forms a strong support foundation. In addition, because the market has turned around here many times, it has also established the psychological support price range for the majority of investors. As long as there is no particularly adverse price increase news, the market will be supported and rebound. Technical analysis defines a price range with a large cumulative trading volume as a "trading intensive area", that is, there is a high turnover rate in this intensive area. If purchasers in dense areas want to make a profit, they need to wait until the commodity price rises above this cost range. These purchasers are those who hold chips. As long as they do not lose confidence in the market outlook, they will not sell chips in this price range. Precisely because those holding chips are reluctant to sell, it is difficult for the market to fall below this price. On the other hand, sellers also have increased currency holdings due to intensive transactions and are running out of chips. That is to say, the supply of chips in the market has shrunk. Although some people who have lost confidence in the market outlook will still sell chips, it will not be a problem. Even if the support line is temporarily broken, as long as there is neither trading volume nor any adverse price increase factors, the price will return above the support line, and the psychological support of the majority of investors will be strengthened again. After the market obtains temporary support in the transaction-intensive area, there are two possibilities for the market outlook: one is a rebound and an increase; the other is that the majority of chip holders lose confidence, are bearish on the market outlook, and sell in large quantities, that is, they change from buyers to sellers. , the support line was effectively broken, and the market continued to decline. Support lines are not only generated in high-trading areas. When the market falls to 50% of the original rising wave, it will take a breather, and a support line will often be formed in this range. This is actually caused by the psychological factors of the majority of investors. Technical analysis calls this rising wave (or Falling wave) returns to the starting point as the principle of symmetry. In addition, the periodic lowest price is often the psychological support line for the majority of investors. When using support lines to analyze commodity prices, you should pay attention to the following points:

(1) In the upward trend, during the retracement process, the negative line of the K line is weaker than the previous positive line, especially close When supporting the price, the trading volume shrinks, and then the positive line quickly eats the negative line, and the commodity price rises again. This is an effective support.

(2) In the upward trend, during the retracement process, the K-line frequently appears negative lines, and the short force increases. Even if it rebounds slightly near the support line, it will be unable to take over, and the commodity price will eventually fall below the support line.

(3) A market stall is formed near the support line. After a period of consolidation, a long positive line appears, and the support line is naturally effective.

(4) A plateau is formed near the support line, but appears after consolidation. With a long negative line, investors are rushing to flee in order to reduce losses, and commodity prices will continue to fall for a while.

(5) The commodity price falls below the support line from top to bottom, indicating that the market will convert from an upward trend to a downward trend. Generally speaking, in an upward trend, an intermediate downward trend appears. If the market falls below the support line of the intermediate downward trend, it means that the upward trend has ended; in an intermediate upward trend, a secondary downward trend appears. If the market falls below The support line of the secondary downward trend indicates that the intermediate upward trend has ended, and commodity prices will continue to decline in accordance with the original downward trend.

(6) The commodity price touches the support line from top to bottom, but fails to fall below and turns around to rise. If there is a large trading volume, when there is another downward adjustment, you can purchase goods to obtain profits. Rebound profits.

(7) The commodity price falls below the support line from top to bottom. Once there is a large trading volume, it means that another period of decline has formed. If there is a slight retracement, shipments should be made to avoid greater losses.

(8) The commodity price touches the support line from top to bottom. Although it has not fallen below, there is no trading volume to match, which indicates that there is no possibility of rebound, and you should ship out as soon as possible.