What's up with resistance and support

Stocks tend to follow a pattern, which Technical Analyst refer to as Support and Resistance.

For support, this is this is the price point where more buyers are willing to step in and buy the stock than sellers are willing to sell.

Resistance on the other hand is where fewer buyers are willing to buy the stock at this price while more sellers are willing to sell.

Once a stock either breaks above resistance or below support these levels now become the new support or resistance levels.

For this specific stock during the month of April, $.76 proved to a point of resistance, the stock price failed twice to breach this point, but on the third try (supported by large volume) the stock was able to break out into unknown territory, eventually finding resistance around $.88. 

Often when a stock finds a new resistance level it will move back down to the new support level to test that level a few times before resuming the trend higher. In this case the stock tested the support twice before breaking the support and headed lower until it found the previous level of support. This stock once again appears to be heading back to $.76 to test the old resistance and if it breaks above it, then a move to $.88 is a really possibility.

The next stock to look at is extremely hard to predict where real resistance will come in and where the support will be when resistance is found, given it is being heavily promoted at this time.

After a long period of consolidation the stock had a nice break out to $.30 where it ran up against resistance, before breaking out for 3 days, with a slight pull back before resuming the uptrend for another 2 days. As mentioned the stock is being heavily prompted right now and even though it started to pull back after the initial 3 day run, more news was released helping to keep the momentum going.

Failing another round of news I would suspect the stock will start to consolidate and I have drawn some points where it may find support. Although $.50 is possible I would think a pull back to $.40 would be a more attractive entry point.

Given the whole marijuana industry seems to be heating up again, I would suspect this stock will take another run at the intraday high of $.66.

*Note: There are always exceptions when it comes Technical Analysis and this applies even more  to penny stocks, which can be easily manipulated and is why many professional Technical Analysts will discount using TA with penny stocks.