Support, resistance, and momentum, without the jargon

Technical analysis sounds intimidating until you realise it's really just three ideas repeated in different shapes: where is price going, where does it stop, and how hard is it pushing? Trend, support/resistance, and momentum. Every indicator and pattern you'll ever read about is a different way of asking those same three questions.

1. Trend — the direction price is actually travelling

Before you do anything else, decide whether the ticker is in an uptrend, a downtrend, or going sideways. Pros call the sideways state "range-bound" and it's worth taking seriously — most losing trades come from mistaking a range for a trend.

The simplest way to read trend: draw a line through the lows if price is rising, or a line through the highs if price is falling. If both lines slope the same way across multiple timeframes, you have a trend. If they don't, you have a range.

Never take a trend signal on one timeframe without confirming it on the timeframe above it.

2. Support and resistance — the levels that matter

Support is a price where buyers have shown up before and stopped a fall. Resistance is a price where sellers have shown up before and stopped a rise. These aren't magic numbers — they're just places where a lot of people made decisions, which means a lot of people remember them.

• The more times a level has held, the more meaningful it is.
• A broken support often becomes new resistance, and vice versa. This is called a flip and it's one of the most reliable patterns in the book.
• Round numbers (100, 500, 1000) act as psychological levels — watch them.

3. Momentum — how hard price is pushing

A stock can be in a clean uptrend and still be running out of steam. Momentum indicators measure that. The two you'll see most often are RSI (Relative Strength Index) and MACD.

You don't need to memorise the math. You need to know what they're telling you:

• RSI over 70 = overbought (price has moved a lot in one direction, may pause). Under 30 = oversold (same, other direction).
• MACD crossing above its signal line = momentum turning up. Below = momentum turning down.
• Divergence — when price makes a new high but momentum doesn't — is the most important signal in either indicator. It means the move is losing energy.

Putting it together

You've just learned enough to read any chart at a professional level. The recipe is always the same: identify the trend, mark the nearest support and resistance, and check momentum. If all three agree, you have a trade. If any of the three disagrees, you wait.

That's it. That's technical analysis. Every book, every indicator, every pattern you'll ever read about is a variation on those three questions. Everything else is packaging.