One such basic theories are called the DEMAND AND SUPPLY. As we know when the Demand is there the Prices go up, and when the Supply is there the Prices come down. In other wards DEMAND is where the Buyers desire to Buy, Whilst the SUPPLY is where the Sellers are willing to Sell.
It is the same with Stocks as well. But by just looking at the market it is not very easy to understand how this theory would benefit the Investor. The most often habit is to check with others, whether the selling or buying is over. Unfortunately that may not be reliable.
Thanks to TECHNICAL ANALYSIS you can now know where the Demand or the Supply is available. This is why Technicians should master the SUPPORT and RESISTANCE LEVELS.
In simple language Support is where there is more Buying, Whilst Resistance is where there is more Selling.
As such when a stock falls to the Support area the DEMAND builds and the Prices move up only to find Resistance to bring SUPPLIERS in to rapid selling. Therefore a trader who wants to follow Technicals must bare in mind that support and resistance areas are where you find the DEMAND and SUPPLY.
Understanding these areas are not easy but NOT HARD. You need to practice and develop the confidence levels in the journey of identifying these areas.
During the latter part of 2015 GRAN.N.0000 had tried to test the range of 94.50 to 100.00 but had failed. This can be seen as the Present Supply force as many Sellers will be willing to sell at this area, whilst the Demand is visible between 87.50 and 92.50, where the buyers appear to be desiring to Buy within this Range. As and when the Buyers succeed to withstand the FORCE OF SUPPLY within 94.50-100.00 then this range will be the desiring range of the Buyers, and the PRICE will move up further testing the SUPPLY Range above.
Figuring the Demand and Supply Ranges are critical for every one who intend to Invest OR Trade in the Stock Market.
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