Trends/Support and resistance

Horizontal resistance

A flat price level where rises have repeatedly stopped and turned back down.

Support and resistanceBest on 3M, 6M, 1YAlso called ceiling, supply level

Illustration of the horizontal resistance shape. It is a sketch, not real price data.

What it shows

Resistance is a price where sellers have appeared before. On a chart it shows up as several swing highs at about the same price. A flat line through them is a horizontal resistance level.

The line does not say price will stop there again. It marks where it has stopped before.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find swing highs.
Group highs that are within the tolerance of each other.
Keep groups with at least 2 highs that are at least 5 bars apart.
Draw the level at the average price of the group.

Starting values: Tolerance 1.5% of price; Minimum touches 2; Minimum bars between touches 5. These are proposed and will be tuned on real price data before launch.

How to read it

Each dot is a high that turned back down at the level.
The more dots and the farther apart they are, the more established the level is.
Price below the level means it still acts as a ceiling so far.

Status labels you may see

Label	What it means
Below resistance	The last close is below the level.
Testing resistance	The last close is within 2% of the level.
Closed above resistance	The last close is over the level.

What cancels it

A close above the level by more than the margin. After that it has been broken.

What traders check next

How many times it held and how long ago the last touch was.
Whether each pullback was bigger or smaller than the one before.
Volume near the level.

Limits

The tolerance changes which highs count as the same.
Levels can break without any warning.
Old levels can lose meaning.

Try it in forecastviz

Open any ticker and choose Support and resistance → Horizontal resistance in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with Horizontal support and Support and resistance zones on the same chart.

Open on a ticker

Questions

Is resistance exact?

No. It is a zone in practice. We draw a line at the average of the highs so you have one clear number.

What happens if it breaks?

The level is marked broken. A broken resistance is often watched as a possible support, which is called role reversal.