Support and Resistance Levels... without Charts

In the death overs of last post I said something about Supports and Resistance without charts... let’s see how we can do that.

Just a small detour before we get to that. As you guys know that I cannot and do not want to trade from office as far as possible. I can call up the broker if some really really great opportunity knocks but it has not happened so far. I only look at the market trend and do the predetermined trades based on homework a night before. I miss the college days for that freedom...

The point here is because of my inability to track the market hourly or daily… I work with weekly levels. I decide the Supports and Resistance based on weekly charts and accordingly open the trades. I try to close all my positions on Friday and start new positions on Monday. Another thing is I am not a compulsive trader... it is very dangerous thing to be and I will talk about it on Equity Blog. So I trade when I get the risk-profit ratio in my favor or suiting to my appetite or otherwise I simply let it pass.

Coming back to main objective of our post, I will explain how to find out Support and Resistance levels for the week based on data of previous week (disclaimer: I do not use this system anymore and prefer charting and hence have not used it for a long time).

First step is to find out Average Level of NIFTY for the week gone by and it can be done as below;

Avg Level = Avg (Highest Level, Lowest Level, Weekly Close)

From this 4 data points(3 levels of NIFTY and Avg Level as calculated) we can get Support and Resistance as below;

Support = 2 x Avg Level - Highest Level

Resistance = 2 x Avg Level - Lowest Level

Let’s see the illustration for the last week;

Highest Level = 5160.25 (Monday)

Lowest Level = 5011.05 (Tuesday)

Weekly Close = 5049.95

Avg Level = 5073.75

Support = 4987.25

Resistance = 5136.45

Have to rush someplace so follow up, comparison with charting levels, trade as per these levels and more in the next post.