How strong is a level
Intermediate · 2 min
The same price can be a strong floor or a shaky guess — what actually makes one worth trusting.
Two shares can each show a floor at some price on the chart. One of those floors is worth planning around. The other is barely a floor at all. The price on its own does not tell you which — you have to look at how it was built.
How long it has held
A bounce off a price once, last week, might just be chance. A price the share has bounced off three or four times, spread over several months, is one enough people have actually reacted to. The longer a level keeps working, the more it is worth marking — and the more it costs you when it finally gives way.
How much was traded there
A bounce on a quiet day means a handful of people made that decision. A bounce on a day with heavy trading means a lot of people agreed, at the same price, at the same time. That is a stronger floor than the same price touched on a day nobody was paying attention.
How close it is to today's price
A level ₹40 away from where the share trades now can matter to your next trade. A level ₹400 away, left over from a crash two years ago, probably never will. Mark the levels close to today's price. The distant ones are history, not a plan.
Checking one level on a ₹500 share
- Share price today
- ₹512
- Level being checked
- ₹480
- Times it has held in the last 5 months
- 3
- Volume on each bounce
- higher than the days around it
- Distance from today's price
- ₹32, about 6% below
All three line up: tested more than once, over months, on rising volume, and close enough to matter. Drop any one of those and the line is just a guess with a price attached.
Try this in the app
- Research — check how a level has actually held up
Share this lesson
Works with
- Key points and breakouts — Some prices matter more than the rest, and a share that clears one is telling you something.