Drawing support and resistance that still matter next week
Horizontal lines are easy to draw and hard to draw well. A chart covered in levels that price ignores within days adds clutter without insight. We use three criteria before any line goes on the chart.
Criterion 1: Multiple reactions at the level
A valid horizontal level should show at least two clear reversals — price approached the zone and changed direction. A single wick does not qualify. We prefer three touch points when available, especially on the weekly timeframe where daily noise is smoothed out.
Criterion 2: The level reflects traded volume
Look at the volume bars at each touch point. Levels where price reversed on above-average volume carry more weight than levels where price drifted through on thin participation. This connects directly to our volume-first screening approach.
Criterion 3: The level is still untested or recently respected
Old levels from two years ago may no longer matter if price has spent significant time above or below them since. We prioritize levels within the current trading range or recently broken levels being retested. A resistance line from a prior bull market top is context, not an active level, unless price has returned to test it.
Common mistakes we see in workshops
- Drawing lines through wick extremes instead of through the body cluster where trades actually occurred
- Marking every round number (50,000 VND, 100,000 VND) regardless of price behavior
- Using daily levels when the weekly chart shows a completely different structure
- Leaving stale lines from last month's scan without checking if price invalidated them
Weekly before daily
We mark weekly structure first, then check whether daily price action aligns. A daily support level that conflicts with weekly resistance is a warning sign, not a trading opportunity. Alignment between timeframes is a requirement before a name enters our watchlist.