Resistance and Support Scanner

Resistance and Support Scanner

From our previous article, you must be already familiar with the functions and applications of ‘Spreads’ scanner, as well as how to utilize the scanner for picking out profitable trades. Now, let us take a look at our next scanner – ‘Resistance and Support Scanner’.

The Resistance and Support scanner help in identifying the nearest resistance levels and support levels of the stocks. These levels are identified based on the Pivot of the High, Low, and Close price of the previous day. The stocks of a particular resistance or support levels are then displayed under each category of the scan result. The results of Resistance and Support scanner can be used in conjunction with other scanner results for forming various trading strategies. The scan results of Resistance and Support scanner are divided into following categories – R3, R2, R1, P, S1, S2, and S3.

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Resistance and Support Scanner – Interpreting the Results

The results of the Resistance and Support Scanner are as follows:

  • On tapping on ‘R3’ of the scanner results, it displays the stocks that are lying on the resistance level of R3 or are closer to R3.
  • On tapping on ‘R2’ of the scanner results, it displays the stocks that are lying on the resistance level of R2 or are closer to R2.
  • On tapping on ‘R1’ of the scanner results, it displays the stocks that are lying on the resistance level of R1 or are closer to R1.
  • On tapping on ‘P’ of the scanner results, it displays the stocks that are lying on the pivot level or are closer to the pivot level.
  • On tapping on ‘S1’ of the scanner results, it displays the stocks that are lying on the support level of S1 or are closer to S1.
  • On tapping on ‘S2’ of the scanner results, it displays the stocks that are lying on the support level of S2 or are closer to S2.
  • On tapping on ‘S3’ of the scanner results, it displays the stocks that are lying on the support level of S3 or are closer to S3.

Note: The number displayed beside the R1, R2, R3, P, S1, S2, and S3 denotes the number of stocks in that particular level of resistance or support or pivot point.

Each of the Resistance, Support, and Pivot levels are provided with two drop-downs for filtering the results further. They are –

  • Based on the market – NSE, MCX or BSE
  • Based on Sectors like – Nifty 50, FMCG, Metal, IT, Media, Nifty Bank etc.

This is shown in the screenshot below.

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The figure above displays the scan results of Resistance and Support Scanner for the resistance level R1. The results of the scan displayed consists of the following values – Exchange, Value of R1, and Last price with % change.

Example: In the figure, you can see that the stock BAJAJHLDNG is listed in the ‘R1’ category of the Resistance and Support scan result. The stock is traded in NSE, has R1 value of 1969.8, last price of 1982.2, and % change of 2.27%.

This stock is displayed under R1 as its last price (1982.2) had breached the Resistance level 1 (1969.8) of the stock as per the pivot-support-resistance calculations.

Also Read : Rise & Fall Scanner

This can also be indicated as shown in table below

Breached R3? Breached R2? Breached R1? Breached P? Breached S1? Breached S2? Breached S3? Displayed under
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Steps to get the list of stocks of ‘Resistance and Support’ Scanner Criteria

Step #1: Login to Sine App and click on the dropdown icon from Dashboard page.

Step #2: From the drop-down menu displayed, click on ‘Analytics’

Step #3: From the Analytics page, click on ‘Resistance and Support’ scanner

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Step #4: The results of the scan would be displayed in seven tabs: R3, R2, R1, P, S1, S2, and S3

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Also Read : Volume Shocker Scanner

Calculations

The calculation of pivot points, support levels and resistance levels of a stock are done as follows:

Assume that the current day is denoted as N. Then,

  • High = (N-1) day’s High
  • Low = (N-1) day’s Low
  • Close = (N-1) day’s Close

 Pivot Point = (High + Low + Close)/3

R1 (Resistance #1) = 2XPivot – Low

S1 (Support #1) = 2XPivot – High

R2 (Resistance #2) = Pivot + (R1 – S1)

S2 (Support #2) = Pivot – (R1 – S1)

R3 (Resistance #3) = High + 2X (Pivot – Low)

S3 (Support #3) = Low – 2X (High – Pivot)

Example: The stock DB (International) Stock Brokers Limited has a high price of 17.40, Low of 16.95, and Close of 16.95. These values are then used for calculating the values of P, R1, R2, R3, S1, S2, and S3.

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After doing the calculations, the values of R1, R2, R3, P, S1, S2, and S3 are as follows

Pivot Point = (High + Low + Close)/3 = (17.40+16.95+16.95)/3 = 17.10

R1 (Resistance #1) = 2XPivot – Low = 2X17.10 – 16.95 = 17.25

S1 (Support #1) = 2XPivot – High = 2X17.10 – 17.40 = 16.80

R2 (Resistance #2) = Pivot + (R1 – S1) = 17.10+ (17.25 – 16.80) = 17.55

S2 (Support #2) = Pivot – (R1 – S1) = 17.10 – (17.25 – 16.80) = 16.65

R3 (Resistance #3) = High + 2X (Pivot – Low) = 17.40 + 2X(17.10 – 16.95) = 17.70

S3 (Support #3) = Low – 2X (High – Pivot) = 16.95 – 2X(17.40 – 17.10) = 16.35

This can also be seen from the Snap Quote section of the stock as shown above.

Functions that can be performed on the Scanner Results list

Various functions can be performed on the scanner results. For doing that, click on any of the stocks of the scan result.  Then the associated functions would be displayed below it. Following functions can be performed on each of the stock that is displayed as the scan result:

  • Add to Watchlist
  • Snap Quote
  • Place order
  • View Chart – includes indicators like Bollinger Bands. MACD, moving averages, RSI etc.

On clicking on each of those symbols, the corresponding function is executed. The figure below shows the various functions

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Conclusion

Resistance and Support Scanner lists out stocks that are at a support, resistance, or pivot level. The results of this scanner can be used in conjunction with other scanners to identify the general trend of the stock and thus enter into profitable trades at support levels. Alternatively, you can also exit trades or enter short positions near the resistance levels if the trend of the stock seems bearish using the other scanner results.

Next, we will take a look at the scanner called Open High or Low.

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