Psychological factors are not the only basis, and other basis can be found, such as the recurrence of history, but psychological factors are the main theoretical basis.
The pressure line plays a role in preventing the stock price from rising further. This value, which can prevent or temporarily prevent the stock price from rising further, is the position of the pressure line.
When the stock price falls to a certain price, it stops falling and may even rise, which is caused by many parties buying here. The support line plays a role in preventing the stock price from falling further.
This price plays a role in preventing the stock price from falling further, which is the position of the support line. The technical analysis method of indicators is to consider all aspects of market behavior, establish a mathematical model, give a mathematical calculation formula, and get a number that reflects the inherent nature of a certain aspect of the securities market.
Extended data:
The function of support line and pressure line is to prevent or temporarily prevent the stock price from continuing to move in one direction. There is a trend in the change of stock price. To maintain this trend and the original direction of change, we must break through the obstacles that hinder its progress.
For example, to maintain the falling market, it is necessary to break through the resistance and interference of the support line and hit a new low; To maintain the rising market, we must break through the resistance and interference of the rising pressure line and create a new high point. It can be seen that the support line and pressure line may be broken sooner or later. They are not enough to prevent the stock price from maintaining its original changing direction for a long time, but only temporarily.
At the same time, the support line and pressure line may completely prevent the stock price from changing in the original direction. When a trend ends, it is impossible to create new low prices and new high prices, so the support line and pressure line are extremely important.
Support lines are not only generated in transaction-intensive areas. When the market falls to 50% of the original rising wave, it will catch a little breath, and there will often be a support line in this interval, which is actually caused by the psychological factors of investors. Technical analysis says that this rising wave (or falling wave) returns to the starting point as the principle of symmetry. In addition, the staged lowest price is often the psychological support line of investors.
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