Support and Resistance Levels — Finding Entry and Exit Points

Support and resistance are among the most fundamental concepts in technical analysis. Support is a price level where buying interest is strong enough to prevent the price from falling further. Resistance is a price level where selling pressure is strong enough to prevent the price from rising further.

Support levels form when a stock repeatedly bounces off a specific price. Imagine a stock that drops to 45 EGP three times over several weeks and bounces each time — that creates a strong support at 45. The more times a level is tested and holds, the stronger it becomes.

Resistance levels form when a stock repeatedly fails to break above a specific price. If a stock hits 60 EGP four times and reverses each time, 60 is a strong resistance. When resistance finally breaks, it often becomes new support — this is called a "role reversal."

Fibonacci retracement levels provide additional support/resistance zones. After a significant price move, the stock often retraces to key Fibonacci levels (23.6%, 38.2%, 50%, 61.8%). FoudaLens calculates these levels automatically and checks for confluence — when multiple methods point to the same price level.

Pivot Points are another method for calculating support/resistance. They use the previous day's high, low, and close to project potential levels for today. Professional traders widely use pivot points, especially for short-term trading.

How to use these levels practically: (1) Buy near strong support with a stop-loss just below it. (2) Take profits near resistance or wait for a confirmed breakout above it. (3) Look for confluence — when Fibonacci, pivot, and historical S/R levels align, that zone is very significant.

FoudaLens scenarios use these levels to calculate entry points, targets, and stop losses for each investor profile (speculator, short-term, long-term). The confluence detection system highlights zones where multiple support/resistance methods agree. This is not financial advice.