Trends, support, resistance and chart patterns
Spot the trend, mark the levels that matter and recognise the chart patterns traders watch.
1. What a trend is
An uptrend makes higher highs and higher lows. A downtrend makes lower highs and lower lows. Anything else is a range (sideways).
Markets spend a lot of time in ranges. Recognising that you are in one, and not forcing a trend trade, is a skill in itself.
Moving averages (covered in the indicators course) help smooth price so the direction is easier to see.
2. Support and resistance
Support is a price zone where buying has repeatedly stopped a fall. Resistance is a zone where selling has repeatedly stopped a rise.
- Previous day's high, low and close
- Round numbers (25,000 on Nifty, 55,000 on Bank Nifty)
- Recent swing highs and swing lows
- Pivot points calculated from the previous session
- Strikes with very large open interest in the option chain
Think in zones, not exact prices. When a level breaks, it often flips role: old resistance becomes new support.
3. Breakouts and false breakouts
A breakout is a close beyond a level that held before. Stronger breakouts come with higher volume and a candle that closes well beyond the level, not just a wick through it.
A false breakout (a trap) pokes through a level and quickly reverses. Traps are common around obvious levels because many stop-losses sit there.
Waiting for a candle to close beyond the level, or for a retest that holds, filters many false breakouts at the cost of a slightly worse entry.
4. Classic chart patterns
| Pattern | Typical meaning |
|---|---|
| Double top / double bottom | Two failed attempts at a level; possible reversal once the middle low/high breaks |
| Head and shoulders | Three peaks, middle highest; reversal pattern confirmed by a break of the neckline |
| Ascending / descending triangle | Flat resistance with rising lows (or flat support with falling highs); pressure building |
| Flag | A short, orderly pause after a sharp move; often continues in the direction of the move |
| Range (rectangle) | Price bounces between clear support and resistance until one side breaks |
Patterns are easy to see in hindsight and harder in real time. Measure how often they work on your instrument and timeframe before relying on them.
5. Putting it together
A simple routine: note the higher-timeframe trend, mark previous day high/low/close and the nearest round numbers, add pivots, then check where heavy option open interest sits.
Trade in the direction of the trend near support (in uptrends) or resistance (in downtrends), and place your stop where the idea is clearly wrong: beyond the level, not at it.
Key takeaways
- Uptrends make higher highs and higher lows; downtrends the reverse; everything else is a range.
- Support and resistance are zones where price has reacted before; broken levels often flip roles.
- Confirm breakouts with a close and volume; expect false breakouts at obvious levels.
- Chart patterns are probabilities, not promises.
Try it on ExpertView: Calculate pivot levels for the next session →
From ExpertView's free courses at expertview.in/learn. For study and educational use. Not investment advice. Rules, lot sizes, taxes and timings change; check the latest from NSE, MCX, SEBI and the Income Tax Department.