Two Ways to Purchase Stock
Buying at Support
- You can purchase when the stock bounces off the support and is heading in an upward direction.
- Support buying is typically healthier than resistance buying in terms of risk management.
Buying at Resistance
- You can purchase as the stock clears the resistance area.
- Buying at resistance is riskier than buying at support because once the stock clears the resistance it will bounce off the new resistance line, but may dip back to prior levels if it isn’t strong enough to continue upward.
You also do not want to purchase as the stock is descending because it may just continue to descend.