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Tag: support and resistance

  • How SIP Investors Can Use Support & Resistance Zones to Build Confidence

    SIP investing is supposed to be simple. You pick a good fund or stock, set a monthly amount, and automate the rest. No emotions. No overthinking. Just consistency.


    But even the most disciplined SIP investors check their holdings once in a while—and wonder:
    “Did I just buy at the top again?”
    “Should I pause and wait for a dip?”
    “Is this stock really at a good level?”

    That’s where a basic understanding of support and resistance comes in—not to time the market, but to feel more in rhythm with it. At Zebu, we’ve seen more SIP users start to explore charts—not to become traders, but to make peace with volatility. And in that process, support and resistance zones have become quietly useful.


    What Are Support and Resistance Zones—Really?

    Forget the technical definitions for a moment. Here’s the simple version:

    • Support is a level where a stock or index tends to stop falling. It’s where buyers feel the price is “worth it.”
    • Resistance is a level where it tends to stop rising. It’s where sellers often step in.

    Think of support as a floor, and resistance as a ceiling. Prices may bounce off them or break through—but they often matter because many people think they matter.

    They’re not fixed lines. They’re zones. And they’re not predictions. They’re just reference points.


    Why Should SIP Investors Care?

    If you’re investing regularly—monthly, quarterly, or even annually—knowing where support and resistance zones lie can help you:

    Stay calm when prices dip near known support
    Avoid chasing stocks that are right at long-term resistance
    Choose better entry points when you manually top up
    Understand if recent performance is part of a pattern—or a potential shift


    Again, this isn’t about stopping your SIP every time a resistance is near. It’s about context.


    A Practical Example

    Let’s say you’re doing a SIP into a quality mid-cap stock—say, ABC Industries.

    You notice the stock has bounced from ₹720–740 three times in the last six months. That’s a support zone.

    On the upside, every time it hits ₹840–860, it pulls back. That’s a resistance zone.

    Now imagine your SIP executes at ₹850. It’s still okay—you’re building long-term. But knowing this zone exists might help you:

    • Manually top up if it dips again near ₹740
    • Pause optional additions if it runs ahead of earnings and hits ₹860
    • Stay patient if it dips post-purchase, because you expected that zone to attract buyers

    This isn’t prediction. It’s preparation.

    What the Market Is Doing Right Now

    In July 2025, Nifty is trading around 23,400, while Sensex hovers above 77,000. We’ve seen:

    • Recent support near 22,900 on Nift
    • Resistance around 23,500–23,600
    • PSU banks and capital goods showing relative strength
    • FMCG stocks pausing after strong runs

    If you’re SIP-ing into index ETFs or sector-specific funds, this information gives you a map—not a rulebook.

    For instance, a PSU-focused SIP may ride short-term momentum. An FMCG-focused one may cool temporarily. But support zones below recent dips suggest buyers remain active.

    Using Support & Resistance Without Overthinking

    You don’t need to spend hours on charts. Here’s a simple routine:

    1. Log into Zebu → Check the stock or index you’re investing in
    2. Use basic chart view → Select 6-month or 1-year timeframe
    3. Look for clusters → Price zones where moves repeatedly slow, reverse, or gather volume
    4. Set alerts → Use Zebu tools to notify you when your asset nears those zones

    Then forget it until you need it.

    These zones aren’t guarantees. But they help filter noise. Instead of reacting to a 3% drop, you’ll think, “Ah, back near support.” That mindset shift matters.

    Common Questions We Hear

    Q: Should I stop my SIP near resistance?
    Not necessarily. But you might choose to pause optional top-ups or diversify new funds elsewhere.

    Q: What if support fails?
    That happens. It doesn’t mean your SIP was wrong. But it might prompt a deeper look at why the stock or fund broke structure—news, results, sentiment.

    Q: Can I do this without charts?
    Basic support/resistance data is built into many Zebu screens. You don’t need to draw anything. Just glance.

    Where This Really Helps: Emotional Control

    The real benefit of using support and resistance as an SIP investor is not better timing. It’s less panic.

    • You’ll stop feeling like every market dip is a mistake
    • You’ll stop buying out of FOMO at resistance.
    • You’ll ride volatility with context.

    We’ve seen this play out across Zebu’s delivery-based users. The ones who use charts—not obsessively, but observationally—tend to hold better, longer, and with more confidence.

    Zebu Tools That Help You Do This Quietly

    Our platform supports non-intrusive investing. That means:

    • Chart views that aren’t cluttered with signals
    • Alerts tied to price levels—not just price change
    • Watchlist summaries that show bounce zones and momentum levels
    • Delivery snapshots that help you track entry points over time

    Because most SIP investors don’t want noise. They want a calm check-in now and then—enough to feel grounded.

    Final Thought

    Support and resistance zones won’t change your financial goals. But they might help you stay with them longer. If your SIP is into something solid, short-term movements shouldn’t throw you. But knowing where the price has historically turned can anchor your confidence—and make you feel less like you’re flying blind.

    At Zebu, we don’t want every investor to become a chart reader. We just want every investor to feel like they can see what matters. Because investing, when it’s done quietly and consistently, shouldn’t feel confusing. It should feel yours.

    Disclaimer

    This article is meant for educational purposes only and does not constitute investment advice or financial recommendations. Support and resistance zones are based on historical data and do not guarantee future performance. Zebu encourages users to consult with a certified advisor before making investment decisions based on technical indicators or personal interpretations.

    FAQs

    1. How can SIP investors use support and resistance?

      Support and resistance in stock market help SIP investors identify price zones where stocks are likely to bounce or face selling pressure, aiding better timing decisions.

    2. When to buy using support and resistance?

      Buying near strong support levels and avoiding purchases near resistance in stock market can improve entry points and reduce risk.

    3. Do support and resistance work for long-term SIP investments?

      Yes, resistance level in stock market can guide SIP investors on when to adjust allocations or pause contributions, complementing long-term goals.

    4. What tools can SIP investors use to find support and resistance?

      Charts, moving averages, and trend lines are common tools to spot support and resistance zones effectively.

    5. Can support and resistance help improve SIP returns?

      Yes, using these zones can improve timing decisions, helping SIP investors optimize returns over the long term.

  • The Anatomy Of A Perfect Breakout Trade

    Buying the breakout is a strategy in which you wait for an asset’s price to turn around and then try to invest in the early stages of its rise. (Some traders also use the word “breakout” to describe sharp price drops that happen after a time when prices went up or were stable.) When the decline stops and things start to get better again, this is called a “breakout.” The goal is to come together before the asset gains a lot of value.

    A retest happens when a stock price breakthrough is followed by a trend reversal and a return to a predetermined price range, such as the area around its 21-day simple moving average. Most of the time, the price goes back to where it was before the breakout. After that, it goes back to the way it moved before it broke out.

    When you buy the retest, you wait until after the breakout and buy the asset when it goes back into the range it was in before the breakout. This is helpful because it lets you move more methodically. You don’t have to invest right away because you don’t want to miss out. A retest also usually means that prices will be more stable in the future. The second breakthrough price range is more likely to hold.

    The problem with buying the breakout is, of course, that you can’t be sure when a breakout will happen until it has already happened. Even if an asset continues to lose value, its price can change from time to time. Sometimes, though, the asset has been revalued over a long period of time. In this case, any price changes will be made within a range of the new normal. You try to be right by making the best guess you can about what will happen to the price.

    And the problem with waiting for a retest is that it may never come. A very powerful breakout might be so strong that the price might breakout of a range and never move back inside if it. That is why, it is important for you to perform your own backtests and ensure that you choose a versatile strategy that lets you make the most of it.

    The most common indicator that intraday traders use to trade retest breakouts is the VWAP. It is the Volume Weighted Average Price that the price often moves to before moving again. For example, you mark the high and low of the 15 minute range of Nifty, and see a breakout happening at the high, then wait for it to come back to the VWAP before initiating a long trade. This will give you an attractive Risk:Reward Ratio.

    If you would like to start trading breakout strategies, open your best trading account with Zebu today.

  • How to Avoid False Breakouts?

    How can we avoid false outbreaks?

    Since this is a problem that many traders face, it was also the reason we wrote this post. At first, trading breakouts may seem easy, but they quickly become hard to do in real time.

    This article gives you five important tips for trading breakout setups with more success and confidence.

    Let’s begin.

    Rule 1: Change the map and look for patterns.

    No trader knows for sure if a breakout will work or turn out to be a false break. As usual, the market decides what to do and what to say. We traders must listen and follow, NOT the other way around.

    Many traders make the mistake of studying and making predictions about the markets, only to blame the market when their predictions don’t come true. Trading doesn’t operate like this.

    The most likely path of least resistance, which acts as a road map for pricing, needs to be found over and over again. This is not a set path, and you have to keep improving it.

    Also, keep in mind that chart patterns come first, and breakout trade ideas come after that. Learn and recognise all chart patterns, or at least the most common ones.

    For example, if you know what a contracting triangle is and how it is expected to form five waves (ABCDE), you can figure out when to expect a real breakout.

    Rule 2: Wait for breakouts with strong candlesticks

    We can tell if a breakout is successful by looking at how strong the candle closes. When the candlestick closes close to the high or low, this is called a powerful candle closure.

    How a breakout setup and a candlestick closure work together is as follows:

    A strong bullish breakthrough is shown by a candle that closes close to the high.
    When a candle closes close to the bottom, this is a strong sign that the price is going down.
    The power can also be seen in the size of the candle. Compared to the other candles in that time frame, a big breakout candle is shown by a big candle, not a small one. Even though candle size is important, how close the candles are to each other is more important.

    Rule 3: The break of the break

    Traders love trading breakouts by focusing on a single time frame, watching for a drop, and then letting the trade develop. If you could see a pattern on a 4-hour chart, for instance, you would zoom in on a 1-hour chart and look for a smaller pattern to show up over that time. Why?

    Because when price makes a pattern after a big breakout, it shows that the breakout is real. It shows that the price is in fact making a new correction after gaining momentum. Price psychology in the market suggests that this is a sign of more of the same.

    If prices don’t form a pattern after the breakout, it’s likely that they will turn around and move quickly in the opposite direction. If that’s the case, the price is either making a false breakout or has hit a major support or resistance level and is now strongly going back up. In any case, it’s smart to stay outside.

    Rule 4: Candle Close and Body Above the Support and resistance

    Reviewing how market activity relates to the support or resistance (S&R) level is a good approach when employing moving averages and trend lines.

    When the candle body is above the MA or trend line (50% is respectable), the breakout is at its finest.

    By following these tips, you can avoid a significant amount of false breakouts. To open a demat account with Zebu and start trading breakouts today, please get in touch with us.

  • How To Trade With Support And Resistance


    Title Page Separator Site title

    Technical analysts use a number of rules to predict how much stocks will go up or down in the future. Once you know what a trend is, the next important idea in technical analysis is support and resistance.

    The theory of support and resistance

    According to technical analysis, when the price of a stock reaches certain predetermined price points, it tends to stop and move in the opposite direction.

    Support level: This is the point where the price of a stock stops going down. It’s possible that the price will go up instead of down. At this point, it is likely that the demand from buyers will be much higher than the demand from sellers.

    Resistance level: The opposite of a level of support is a level of resistance. It is a price level (ceiling) above which the stock price is not expected to rise. At this price, the market for this stock is better for sellers than it is for buyers.

    What does support mean?

    The support and resistance levels on a candlestick chart might help you figure out the target price at which to buy or sell. The support level is where the market expects more buyers than sellers. The price at which traders can expect to see the most buying interest in a stock is called the support level on the chart.

    In a falling market, the support-resistance indicator, which is an important level market player to watch for, is often a sign to buy. The support line is formed when the price of a security goes down and the demand for shares goes up.

    What is resistance?

    On a candlestick chart, a price has reached the resistance level when there are more sellers than buyers. Resistance level is a price point on the chart where traders expect to sell as much of a certain stock as they can. It keeps the price from going up even more.

    Since resistance is always higher than the current market price, it is often a sign to sell. In a bullish market, the resistance level is one of the most important things that traders pay close attention to. Support and resistance are, in a nutshell, the exact opposites of each other.

    By looking at the support and resistance levels, the trader can get an idea of how the price of a stock will move. But there is always a chance that the stock price will go above these levels. When this happens, which happens often, a new level of support and resistance is set up.

    If the support level is broken, the stock price will keep falling until it finds a new level to support it. Also, if the stock price breaks through the resistance level, it keeps going up until it hits a new resistance level.

    Resistance and Support: How Reliable Are They?

    Even though support and resistance can tell you when to buy or sell, you shouldn’t rely on them alone. Or, to put it another way, before deciding whether or not to buy or sell a certain stock, you should think about a number of other things.

    When it comes to technical analysis,
    Predicting the future price of a stock is the most important (and hard) part of analysis for a trader in the stock market. The next high (or low) price cannot be predicted with any level of reliability.

    So, the idea of support and resistance is a good way to understand how prices change. Support and resistance levels help traders make decisions because they let them see patterns.

    For example, if a trader sees that a stock has reached a support level, he could buy more shares. This is done so that the stock has a better chance of coming back. In a similar way, the trader may sell his shares and make money when the stock reaches a level of resistance.

    When a stock’s price reaches these levels, you should always be careful because the area between the support and resistance levels is known to be very volatile.

    Conclusion

    Traders can use the idea of support and resistance to spot trends in the stock market and take advantage of them.

    This doesn’t mean, though, that the stock will never go above a support or resistance level. The price of a stock can always go up or down. Also, as a trader, you shouldn’t make trades based only on these levels.

  • Trendline Trading Strategies For Beginners

    Individual traders tend to utilise technical analysis more frequently than fundamental analysis, so trendlines are particularly popular in both forex and cryptocurrency trading. Interest rate movements affect forex markets, yet central banks’ established interest rates seldom fluctuate. This implies that prices fluctuate in line with traders’ predictions of interest rates, which are far more difficult to interpret. Price action and analytical tools like trendlines, according to technical experts, are the most reliable ways to gauge the sentiment of traders.

    Trading strategies using trendlines

    There are other methods to employ trendlines, but in this article, we’ll go through the two most popular trendline trading techniques as well as a third, less well-known but extremely viable, strategy.

    1) Trendline reversal

    Trading in accordance with the trendline-supported trend is the aim of this technique. Either purchasing or selling near to an uptrend or downtrend line.

    Steps in the plan:

    Decide if the price is moving up, down, or sideways.
    Create a trendline that connects at least three swing points.
    the trendline be extended into the future
    A) Watch for a subsequent price contact of the trendline B) Place a limit order at the trendline (adjust as price moves)
    When the price has reached the trendline, place a trade in the trend’s direction.
    In an upswing, place a stop-loss order under the prior swing low (above the previous swing high in a downtrend)
    Place a take profit order with a minimum ratio of 2:1 to the stop loss size.
    Example of a chart: trendline bounce

    2) Trendline break-through

    Although the trendline breakout may be utilised to trade against the trend, that is not what we are promoting here. How is breaking a trendline a trend-following tactic? Trading the breakout of short-term trendlines in the direction of the main trend is how it’s done!

    Steps in the strategy: identify a long-term trend
    Wait for a price “correction” or buck the general trend.
    Create a trendline to represent this recent correction.
    Keep an eye out for the price to go over this trendline.
    A) Place a stop order past the trendline to enter on the breakout B) Buy at the break of a downtrend line or sell at the break of an uptrend line
    On the other side of the trendline, place your stop loss order.
    Place a take profit order with a minimum ratio of 2:1 to the stop loss size.

    Examples of charts: inner trendline breakout

    3) Confluence between trendlines

    The use of trendlines is effective, however no technical indicator or price action trading strategy is faultless. Using many analysis techniques and watching for possibilities when they all come to the same conclusion will always boost your chances of success on a transaction.

    For instance:

    Using Fibonacci retracements, draw trendlines
    In this illustration, a buying opportunity at a rising trendline is supported by one at the 61.8% Fibonacci retracement level.

    Moving averages and trendlines
    In this instance, a rising trendline coincides with the prominent 200-day moving average.

    Japanese candlestick designs with trendlines
    In this case, bullish engulfing candle patterns help trendline bounces.

  • How To Trade With The Trendline

    Trendlines are one of the most simple and useful tools that traders use. Read on to find out what they are, how to draw them, and the best ways to trade based on trendlines.

    What is a trendline?

    A trendline is a line that is drawn through a chart to show the trend. On price charts, trendlines are drawn to show the general direction of prices in the trading environment. Traders use this information to decide whether to buy or sell in the direction of the trend. Trendlines can be used to track the price of a stock, a currency pair, or a cryptocurrency. In technical analysis, trend lines are one of the most common ways to show how prices are moving.

    A good example of how a trendline works

    Usually, a trendline is made by drawing a straight line between a number of swing highs or swing lows. For an up-trend line and a down-trend line, the swing lows and swing highs are used. In this method, the trendline helps traders understand till when a trend can continue. These can also be thought of as dynamic support and resistance points.


    Starting on the left side of the chart and moving the line to the right is how you draw a trendline. As a general rule, a trend line must go through at least three price “swings” before it can be taken seriously.

    How to use trend lines in trading

    Use a trend line to figure out the direction of the price trend. Traders can then choose to go with the trend if they think it will keep going or against the trend if they think it will change. Both strategies use the same way to read the trendline.

    Bullish because the price is above the uptrend line, which means the trend is going up.
    Bearish because the price is below a line that shows the price is going down.

    Trend following

    Trend following is a way to trade where you buy when the price is going up and sell short when the price is going down. A common trading strategy is to use an uptrend line to figure out if the general price trend is going up. A decline can also be shown by a line going down.

    Trading against trend

    Countertrend trading is a way to trade where you sell when the price goes up and buy when the price goes down. This is more like the basic rule of investing, “Buy low and sell high.” Reversion to the mean says that after a price trend goes in one direction, it will eventually go back to its average price. This is why short-term traders trade against the trend.

    The following point is one of the most important pointers to remember while using a trendline.

    Using a trendline when there is no trend is the worst mistake you can make as a beginner with trendlines. The clue is in the name!

    The best angle for a trend line is 45 degrees. Even if the trend keeps going in the same direction, a slope of more than 45 degrees means that the price is going up too quickly and could easily break the trendline. Less than 45 degrees means that the trend is weaker and is almost trading sideways.

    Three times in total

    As a trendline goes through more swing points, more traders can see it. This makes the trendline stronger. But after five touches, the chances of the trendline “breaking” are much higher.

    Zoom out

    To see where the trend you’re trying to show with the trendline started, make sure to zoom out on your trading platform’s chart. For example, if you want to draw an uptrend, try to start your trendline at the bottom of the previous downtrend or at the swing low.

    Five trendlines zones

    Trendlines are not based on good science. Price doesn’t often hit a trendline right before it turns around. The trendlines shouldn’t be taken as a specific price but as an “area” of prices. Having this information makes it easier to choose an entry price and a stop loss.

  • Everything You Should Know About Breakout Trading


    Did you know that sometimes on the stock market, fake breakouts can happen? But what are breakouts? How can you tell if a breakout is real or not?

    Assume that there is a resistance for the market at 18,000. When the price reaches there, sellers might come in and try to push the price down. However, if the price manages to move above 18,000, then it is called a breakout.

    Similarly, you could say that there is some support. When the price gets to the support level, everyone buys. When the price hits this level twice in a row, it means something. When there is a third strike and the price goes through the support level line, this is called a breakdown. Simply put, breakouts and breakdowns are a rise and a fall.

    First, let’s talk about what “breakout” means. What price action will help you the most if there is a breakout? For our breakout to happen, a bullish engulfing pattern must form. Now, the price breakout should be supported by the volume breakout, which means that when the price breakout happens, there should be a lot of volume. This can be seen when the volume bars at the bottom of the chart break over the black line that shows the volume line. The first thing is that a bullish engulfing candle pattern forms, and this is the second thing.

    The third and most subtle trait is called consolidation. Think about how the market always forms bullish candlestick patterns right before a breakout during intraday trading on a 15-minute time frame. Many people think the upward trend is reliable, but they will learn over time that after the candle breaks out, smaller green candles, a doge, and finally a huge giant red candle are seen, and smaller red candles start moving sideways. As a result, a lot of people lose. Then, how can we stop this?

    Consolidation. When a breakout happens, it should follow a significant pattern, like three or four contact points. This tells us that the breakout is real, and the breakout of the candle and the volume should back this up. If there has been no consolidation and there is a straight breakout, there is a higher chance that the trade will fail. We should enter those breakout trades when there is a strong consolidation.

    The fourth quality is that it’s been tested more than once. It’s important to test the level of resistance more than once. Let’s say that over the course of 15 minutes, you can see a lot of consolidations against the resistance level, that the resistance line has been reached before and really broken through the day before. It will be less likely that the stock will break through resistance.

    When we talk about breakdown, it’s for the same reason that bearish engulfing candle patterns, the volume breakout, consolidation, and several tests all work. Once all of these checklists are met, then you can go ahead and take your trade. As always, follow a strict stoploss.

    Breakout trading is a simple price action strategy that can work wonders if you know how to prevent false breakouts. To open a trading account with Zebu and start trading breakout strategies today, please get in touch with us.