Why Stockbrokers Do Not Provide Support Resistance Price

Stock Market Support And Resistance Levels

Share market support and resistance levels are fundamental concepts in share trading. They play a crucial role in determining the potential direction of stock prices. Understanding these levels is essential for traders and investors, as they can help identify potential entry and exit points for trades. However, stockbrokers typically do not provide specific support and resistance price levels. Instead, they offer general guidance on these concepts. 

Understanding Resistance Level and Support Level 

Support and resistance levels are key technical analysis concepts used by traders to make informed trading decisions. A support level is a price level at which a stock price tends to find support as it falls. In other words, it is a price level at which demand for the stock is strong enough to prevent the price from falling further. Traders often view support levels as potential buying opportunities, as they believe that the stock price is more likely to bounce back from these levels.

On the other hand, a resistance level is a price level at which a stock price tends to encounter resistance as it rises. It is a price level at which selling pressure is strong enough to prevent the price from rising further. Traders often view resistance levels as potential selling opportunities, as they believe that the stock price is more likely to reverse direction and fall from these levels.

Impact Of Levels of Support and Resistance on Market Trends

Support and resistance levels can have a significant impact on market trends. When an existing trend line reaches a resistance level, it may undergo a dynamic shift, leading to a reversal in the direction of the trend. Similarly, when a trend line is tested multiple times and holds as a support level, it becomes more valid, indicating a strong level of buying interest at that price level.

Why Stock Broker Firms Provide Only General Guidance?

Stock broker companies typically do not provide specific support and resistance price levels for several reasons. 

Firstly, predicting exact support and resistance levels is challenging, as the market is inherently unpredictable. Stock prices are influenced by a wide range of factors, including economic indicators, market sentiment, and geopolitical events, making it difficult to pinpoint precise price levels.

Secondly, stockbrokers cater to a wide range of clients with varying levels of trading experience and risk tolerance. Providing specific support and resistance levels could lead to confusion among clients and may not be suitable for all traders.

In most instances, it is difficult to provide an exact price of a stock where it will find support or resistance; it is easier to offer a level as the market is always subjected to unpredictability.

For instance, when most people choose to trade, they usually have a number they would like to trade at.The trader might buy the stock when it hits Rs. 10, whereas; the current price will be Rs.13. Many other traders will be in the offing for the same price drop.Therefore, for this reason, when the price drops to Rs.10, the volume of the shares increases and it achieves a support level of Rs.10.

Conclusion

While stockbrokers do not provide specific support and resistance price levels, they offer general guidance on these concepts to help traders make informed decisions. Understanding support and resistance levels is essential for traders, as they can help identify potential entry and exit points for trades. By using technical analysis tools and monitoring market trends, traders can enhance their trading strategies and improve their chances of success in the stock market.

Frequently Asked Questions

Why do stock brokers not provide specific support and resistance levels?

Stock brokers typically do not provide specific support and resistance levels because predicting exact levels is challenging due to the unpredictable nature of the market.

What factors make it difficult to predict support and resistance levels?
Stock prices are influenced by a variety of factors, including economic indicators, market sentiment, and geopolitical events, making it challenging to pinpoint precise price levels.

How do stock brokers cater to clients with varying levels of trading experience?

Stock brokers offer general guidance on support and resistance levels to cater to clients with varying levels of trading experience and risk tolerance.

Can traders still benefit from understanding support and resistance levels even without specific guidance from stock brokers?
Yes, understanding support and resistance levels can help traders identify potential entry and exit points for trades, even without specific guidance from stock brokers.