Precourse
Module 1 – How to Track Price Action on Ichimoku Charts
Module 2 – Finding Support and Resistance
Module 3 – Reading the Charts
Postcourse

Support and Resistance Zones Examples – Microsoft & AT&T

In this lesson, we’ll take a look at a few charts and first find the support and resistance zones using the Ichimoku weekly. Then we’ll use the daily to find confirmations. We’ll also examine the 200-period simple moving average.  Finally, we’ll toss on a Fibonacci Retracement and see if it helps refine any zones.

Chart Order:
Weekly with just Ichimoku
Weekly with support and resistance lines
Daily
Daily with 200-period simple moving average
Monthly
Monthly with Fibonacci Retracement
Daily – January 1, 2013
(we’ll use charts in the past so we can look forward two months)
Daily + one month – February 1, 2013
Daily + two months – March 1, 2013

MSFT – Microsoft Corporation

Weekly with just Ichimoku


Weekly with support and resistance lines
Top – Kijun-sen
Middle – Cloud Bottom (Senkou Span B) and Tenkan-sen
Bottom – Cloud Top (Senkou Span B)


Daily showing lines from the weekly
Top – The top line corresponds to a daily Kumo flat area.
Middle – Held as support back in October until the massive gap down below.
Bottom – Gap down to line then acts as support three times. We are currently sitting on the line.


Daily with a 200-period simple moving average added in.
You can see it holds as support back in July and resistance in September.
Currently angled down as resistance above daily Kumo.


Here is the monthly chart. Note that the 200-period moving average is the monthly, not the daily.
MSFT is still in the trading range of 10+ years ago. Monthly Kumo is support below.
We moved to the monthly to apply the Fibonacci Retracement.


I choose to put the Fib from the most recent high to the low of 2009.
The 78.6 line matches up with our top line.
The 61.8 matches with our bottom line and the top of the monthly Cloud.


We are back on a daily chart and we can see we have a support zone between the bottom red monthly line and the 61.8 Fibonacci level. Next, we’ll go forward a month and see what happens.


The bottom support line holds and price rises and finds resistance at the middle red line which is also the top of the Cloud on the daily.


Another month forward finds price continues to consolidate inside the Cloud. In this example, price stays between two of the lines we drew from the weekly.

Chart Order:
Weekly with just Ichimoku
Weekly with support and resistance lines
Daily
Daily with 200-period simple moving average
Monthly
Monthly with Fibonacci Retracement
Daily – January 1, 2013
Daily + one month – February 1, 2013
Daily + two months – March 1, 2013

T – AT&T Inc.

Weekly with just Ichimoku


Weekly with support and resistance lines
Top – at flat Kijun-sen
Middle – on the flat bottom of Cloud (Senkou Span B)
Bottom – at long flat Cloud top and bottom


Here we are back on the daily and we can see the top line matches a flat Kumo here. The middle line has been support for the last few months and the bottom line is quite a way below the current price action. Price is now sandwiched between the middle line and the bottom of the daily Cloud.


Adding in the 200-period simple moving average shows that it has been touched as resistance five times lately.


Here we are on the monthly and we can see the monthly Kijun-sen is the same level as our middle line. The top of the Cloud is creating a support zone right below our middle line.

Interesting how both the daily and monthly had the 200 as resistance. On the monthly, the 200 held as resistance for four years.


Adding in a Fibonacci Retracement gives us a resistance zone between the 78.6 and our top line. The 61.8 adds to our support zone with the middle line.

Notice that the 38.2 and 23.6 both line up with the bottom of the monthly Cloud.


We can now see the Fibs on the daily. If the price action moves up into the Cloud, it has resistance with the 78.6 Fib and 200 daily before we get to our top line. If price falls below our middle line we have the 61.8 Fib as support right below.


Price gaps up the next day right to the Fib line. It runs up for three more days before opening at the Fib line then falling below to the support of the daily Tenkan-sen and Kijun-sen. Support holds for four days before plunging below the Cloud then finding support at our middle line AGAIN. We bounce off and now are at the resistance of the Fib and 200 zone.


The very next day we get a gap up and above the Fib, 200, and Cloud. Look at how price stalls at the top resistance line we drew from the weekly. After 18 trading days, the price action gets above our top resistance line which is now support. We now have a support zone of the top line, daily Tenkan-sen, and daily 200-period simple moving average.