Support line and pressure line are important methods for trend analysis. Generally, the reason for their formation is that the price fluctuates up and down in a certain area, and a relatively large volume of transactions has accumulated in this area. Then after the price crosses or falls below this area, this area naturally becomes the support line or pressure line of the price.

the support line and pressure line are not only generated in the transaction-intensive areas. When the market returns to about 5% of the previous wave of ups and downs, it will take a break, that is, a support line or pressure line will be generated in this interval, which is caused by the psychological factors of most investors, so its vicinity becomes a technical selling and buying price.

In addition, investors will consciously compare the current price with the prices that have appeared in the past, so the lowest price and the highest price in stages are often the psychological support line and pressure line of investors.

Extended information:

Support and resistance will prevent or temporarily prevent the price from moving in one direction. In order to maintain the original fluctuation direction of the price, we must break through the obstacles that prevent it from moving forward. For example, to maintain the falling market, we must break through the interference of the support line and create a new low; To maintain the rising market, we must break through the interference of the rising resistance line and create a new high point.

it can be seen that the support line and the resistance line will be broken sooner or later, and they are not enough to prevent the price from keeping its original fluctuation direction for a long time. It's just a pause.

at the same time, the support line and the resistance line may completely prevent the price from changing in the original direction. When a trend comes to an end, it is impossible to create a new low price or a new high price. At this time, the support line and resistance line are very important.

Baidu Encyclopedia-Pressure Line

Baidu Encyclopedia-Support Line