Support is a price area below the current price where past declines have repeatedly stopped and reversed. Resistance is the mirror: an area above price where past advances have repeatedly stalled. They are among the oldest ideas in chart reading, and they describe where a market has been willing to turn, not where it must turn next time.
Why levels form
Traders remember prices. A level where a market bounced before tends to attract attention again — orders are placed near it, stops are placed just beyond it — and that shared attention can make the level matter for a while. When price finally breaks through decisively, old resistance is often watched as new support, and vice versa.
How MoonWire finds levels
Hand-drawn lines vary from one reader to the next, so our technical reads use a mechanical method that anyone can reproduce:
- Find swing points. A swing high is a candle whose high is above the candles on either side of it; a swing low is the reverse.
- Cluster them. Swing points close enough together — the tolerance scales with average true range, so it widens in volatile markets — are merged into a single level at their average price.
- Count touches. The number of swing points merged into a level is its touch count. A level touched six times has been tested more than one touched twice.
- Report the nearest. Each read lists the nearest support below and nearest resistance above the latest close, with distance as a percentage of price.
We also report the support-to-resistance band: the distance between those two levels as a share of price, which shows how much room the market has between its nearest tested floors and ceilings.
Limits
A level is a summary of past turning points. It is broken regularly, and a high touch count can also mean a level has been leaned on until it gives way. That is why our reads give touches and distances rather than calling levels that "will hold". Zones built from a different idea — where orders concentrated before a big move — are covered under order block.