Swing Trading Chart Analysis – Support & Resistance Levels
General Strategy
- Focuses on long swing trading using uptrend support lines.
- Trades large-cap growth stocks expected to reach new all-time highs.
- Uses ThinkorSwim platform with maximum monthly and daily charts.
Support Line Identification
- Start with maximum monthly chart to see the overall trend.
- Trace support lines by connecting obvious lows using drawing tools.
- Avoid lines that cut through the chart unless necessary.
- Multiple support lines may be traced to identify potential buy zones.
Buying Strategy
- Buy when price touches a support line and begins to rise.
- Confirm with 2–3 higher lows before purchasing.
- Use maximum daily chart for actual buying and selling decisions.
- Arrows on the chart indicate buy (up) and sell (down) points.
Selling Strategy
Three approaches:
- New High Exit: Sell after price reaches a new high.
- Time-Based Exit: Estimate how long the stock previously rose (e.g., 1 year 5 months) and hold for a similar duration.
- Price Ratio Exit: Calculate ratio of previous high to support price (e.g., 1.97×) and apply it to current support price to set target.
Resistance Lines
- Used mainly for selling decisions, not buying.
- Mark previous peaks to estimate potential exit points.
- Sometimes coincide with support lines but not relied upon for entry.
Example Stocks Analyzed
- MCK: Multiple support lines traced; price still rising.
- MKL: Two main support lines selected; others removed due to lack of recent relevance.
- MLM: Currently held; support line used for re-entry; resistant lines marked for exit strategy.
Risk Management & Practice
- Avoid using stop-loss orders; prefer manual analysis.
- Recommend buying one share at a time to test strategy and minimize risk.
- Emphasizes ongoing skill improvement and strategy refinement.
Final Notes
- Strategy is based on uptrend support lines, not horizontal ones.
- Encourages starting small, learning by doing, and analyzing regularly.
- Swing trading is presented as a path toward financial independence.
Conclusion: How to find support and resistance levels-Swing trading chart analysis
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