Stock Market 101 – Lesson 9

Technical Analysis 101: Trends, Support & Resistance

🔹 Hook: Why Do Stocks Stop Falling… and Then Rise Again?

Stock Market 101 – Lesson 9 brings you important topic Please read and learn carefully.

Have you ever noticed this strange thing in the stock market?

A stock keeps falling…
Then suddenly, it stops.
It doesn’t fall further.
After a few days — it starts rising again.

No news.
No announcement.
No magic.

So what changed?

This is where Technical Analysis begins.

Not prediction.
Not astrology.
Not shortcuts.

Just understanding how price behaves.

In this lesson, we’ll break down:

What technical analysis really is
How trends work
What support and resistance mean
Why these concepts matter before you think about buying or selling

If you are a beginner, this lesson is enough to get you started.

🔹 What Is Technical Analysis (In Simple Words)?

Technical analysis is the study of price behavior.

That’s it.

You don’t look at:

Company profits
Balance sheets
News headlines

Instead, you look at:

Price movement
Charts
Patterns that repeat

The idea is simple:

Everything known about a stock is already reflected in its price.

Technical analysis helps you answer one main question:

👉 Is this a good time to enter or exit?

Not what to buy —
but when to act.

🔹Stock Market 101 – Lesson 9

Fundamental vs Technical Analysis (Quick Clarity)

Let’s clear confusion early.

Fundamental analysis helps you decide what to buy
Technical analysis helps you decide when to buy or sell

They are not enemies.
They work best together.

Think of it like this:

Fundamentals = quality of the company
Technicals = timing your action

In Lesson 9, we focus only on technicals.

🔹 The First Rule of Technical Analysis: Price Moves in Trends

Prices do not move randomly.

They move in trends.

There are only three types of trends in the stock market.

🔹 1. Uptrend

An uptrend means:

Price is making higher highs
And higher lows

In simple words:

Each fall stops at a higher level than before
Each rise breaks the previous high

This shows:
✔ Buyers are in control
✔ Demand is stronger than supply

Beginners should respect uptrends, not fight them.

🔹 2. Downtrend

A downtrend means:

Price is making lower highs
And lower lows

In simple words:

Every bounce fails earlier
Every fall goes lower than before

This shows:
✔ Sellers are in control
✔ Supply is stronger than demand

Trying to buy aggressively in a downtrend is risky for beginners.

🔹 3. Sideways (Range-Bound) Market

Here:

Price moves between two levels
No clear higher or lower direction

This usually means:
✔ Buyers and sellers are balanced
✔ Market is waiting for new information

Most beginners lose money here by over-trading.

🔹 Why Trends Matter So Much

Because trends answer one important question:

Should I be aggressive, careful, or patient?

In uptrends → look for buying opportunities
In downtrends → protect capital
In sideways markets → reduce activity

Ignoring trend direction is like swimming against the current.

🔹 What Is Support?

Support is a price level where falling stops.

At support:

Buyers step in
Selling pressure reduces

It’s like a floor.

When price approaches support:

It may bounce
Or pause
Or consolidate

Support is created because:

Many people bought there earlier
They believe it’s “cheap” again

🔹 What Is Resistance?

Resistance is a price level where rising stops.

At resistance:

Sellers become active
Buying pressure weakens

It’s like a ceiling.

When price approaches resistance:

It may reverse
Or slow down
Or struggle

Resistance exists because:

Many people want to exit at that level
They remember past failures there

🔹 Support & Resistance Are Zones, Not Exact Lines

Important point for beginners.

Support and resistance are areas, not perfect numbers.

Price may:

Slightly break them
Slightly undershoot them

That’s normal.

Markets are not exact.
They are emotional.

🔹 Why Support & Resistance Work

Because markets are driven by human behavior.

Fear
Greed
Memory

People remember prices.

If many traders believe:

“This level is strong”

Their actions make it strong.

🔹 Role Reversal: Support Becomes Resistance

This is a powerful concept.

When:

Support breaks → it often becomes resistance
Resistance breaks → it often becomes support

Why?

Because emotions flip:

Buyers who lost money want to exit
Sellers become confident

This happens again and again in charts.

🔹 Multiple Timeframes (Beginner Idea)

Price behaves differently on:

Daily charts
Weekly charts
Monthly charts

A level that looks weak on daily
may be very strong on weekly.

Simple beginner rule:

Identify major support/resistance on higher timeframe
Fine-tune decisions on lower timeframe

No need to overcomplicate this now.

🔹 Confirmation Matters (Don’t Act Blindly)

Never assume:

“Price touched support, so it must rise”

Look for confirmation:

Slowing fall
Small consolidation
Volume change
Clear rejection

Technical analysis is about probability, not certainty.

🔹 Common Beginner Mistakes in Technical Analysis

Avoid these early mistakes:

❌ Drawing too many lines
❌ Changing indicators daily
❌ Ignoring trend direction
❌ Over-trading small moves
❌ Treating TA as prediction

Keep it simple.

🔹 What Technical Analysis Cannot Do

Let’s be honest.

Technical analysis:

Cannot predict news
Cannot guarantee profits
Cannot remove losses

What it can do:
✔ Improve timing
✔ Reduce emotional decisions
✔ Improve risk management

That alone is powerful.

🔹 How Lesson 9 Fits in Your Learning Journey

So far in Stock Market 101:

You learned how markets work
You understood accounts, orders, risk
You learned company fundamentals and ratios

Lesson 9 adds:
👉 Timing awareness

Not trading yet.
Not shortcuts.

Just understanding how price moves.

🔹 Key Takeaways (Remember This)

Price moves in trends
Trends guide behavior
Support and resistance reflect psychology
Charts are tools, not magic
Simplicity beats complexity

🔹 What’s Next?

In the next lessons, we’ll slowly build:

Practical chart reading
Risk control mindset
Smarter decision frameworks

No rush.
No hype.

Just learning the right way.

End Note

This lesson is purely for education and understanding.
No stock tips. No recommendations.

Stock Market 101– Lesson 9: Technical Analysis