Resistance points
Shares can often trade in channels, rarely breaking below or above consistent minimum and maximum prices. Those are a stock's resistance points.
Resistance points are critical to car buyers. Say you budget to spend £10,000. You will happily buy from a dealer for £9,999, but not £10,200 without a big push. The same rule applies to stockmarkets.
Shares, for example, can often trade in channels, rarely breaking below or above consistent minimum and maximum prices. Those are a stock's resistance points.
Chartists spend hours trying to work out where these are and how strong they are how often a stock retraces to a previous one is a good starting point. They also try to work out when a resistance point will be broken, sending the share much higher or lower.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The trick is to try and position yourself ahead of the 'break out'. Fibonacci's golden mean is one way to try and locate resistance points, but there are plenty of others too.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
Money tips for the end of the tax year
The tax year will end on 5 April, and your annual allowances for 2024/25 will disappear with it. Here’s how to get your finances in shape
By Katie Williams Last updated
-
India's stock market decline wipes out $1.3 trillion in market value
More than $1 trillion has been wiped off from India's stock market after investors turn to China. Has the emerging-market darling hit rock bottom?
By Alex Rankine Published