Lesson 5 of 11 · Basics

Support, Resistance & Trends

Where buyers step in, where sellers push back — and how to spot a trend.

What is Support?

Support is a price level where buyers have consistently shown up. Every time the price fell to that level in the past, it bounced back up — because enough buyers thought it was cheap enough to buy.

Think of it as a floor

The price bounces off support like a ball bouncing off the floor. It doesn't have to hold every time — but the more times it's held, the stronger the level.

What is Resistance?

Resistance is the opposite — a ceiling where sellers consistently appear. Every time the price rose to that level, it was pushed back down.

Think of it as a ceiling

Sellers emerge at resistance because they think the stock is expensive there, or because people who bought at that level earlier are exiting to break even.

Support and Resistance — price bouncing between floor and ceiling

A historical example

Example — NIFTY 50 Index, 2023 (historical)

During 2023, the NIFTY 50 index tested the 18,000 level multiple times in September–October. Each time it fell near 18,000, buyers stepped in. That level was acting as support. Once the index decisively broke above 19,500 in October 2023, that level became a new support.

This "resistance becomes support" flip is one of the most useful patterns in technical analysis.

Three market conditions — uptrend, downtrend, sideways

What is a Trend?

A trend is a sustained direction of price movement:

Uptrend — Higher highs and higher lows. Each bounce goes higher than the last.
Downtrend — Lower highs and lower lows. Each bounce fails at a lower level.
Sideways (Range) — Price bounces between a support and resistance band without breaking either.

How professionals use moving averages

Many systematic equity strategies use the 200-day EMA as a trend filter. If a stock's price is above its 200-day EMA, it's broadly in a long-term uptrend — a widely-followed reference that institutional and retail investors alike use to separate bullish from bearish regimes.

Intraday traders often mark the first 15-minute high and low as the "opening range" — these levels act as the session's initial support and resistance that price tends to respect or break decisively through.

Key Takeaways

Support = a price level buyers defend. Price tends to bounce there.
Resistance = a price level sellers defend. Price tends to pause or reverse there.
Uptrend = higher highs + higher lows. Downtrend = lower highs + lower lows.
Broken resistance often becomes support — and vice versa.
Moving averages (like the 200-day EMA) are a common way to define trend direction.

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