Hi Jimmy...S&R is a very visual concept, its best evaluated when plotted on a chart.
Any decent charting software should have this feature.
If you dont have one, you can use NSE TAME, this is quite good as well.
There are Pivot Calculators that calculates the S&R levels on a daily basis based on a 'formula'. There are plenty of free Pivot calculators online that you can use for Indian stocks. Just Google for it.
Also, its not a great idea to trade Options by looking at charts. Options require a different perspective all together.
Support is a level where buyers overwhelmed sellers and took prices higher in the past. This level can be identified as a turning points in chart, where price stops the down move and turns upward. The theory is that when prices comes to that level again, there will be buying interest, as some traders find that price level as a good price to buy. When the support is broken, it is assumed that buying interest at that level has died out.
For Resistance (R) and Support (S) of a particular stock, keep in mind that pivot points are short-term, over-night trend indicators, useful for only one day at a time.
They need to be recalculated every day using the changing price movement. When you are coming in with a bunch of calls, you need to study the historical data for each stock, determining the direction of the trend, it’s strength, buying interest, liquidity, historical supports and resistance (which the pivots R1, S1 etc do not provide).
For each of the above there is a combination of indicators that need to be studied, compared and analyzed, entry and exit levels determined, and in a progressing trade, trailing stops need to be determined.
Formula to calculate resistance and support levels.
Pivot (P) = (H + L + C) / 3 (here H is High, L is Low and C is Closing Price of a particular stock/index)
R1 = (P x 2) – L
R2 = P + (H – L)
S1 = (P x 2) – H
S2 = P – (H – L)
But for making calls for short, mid, long term trades, do not depend on the formula. Do an in depth study.
No, as far as I know, you cannot calculate or rather you cannot depend on the Resistance and Support of Nifty Options. These are very volatile instruments. Hope this helps.
‘Ed’ has clearly defined support and resistance in the above comment. Next comes, what are the ways to find out support and resistance levels.
Different ways are:
1)Previous Market Structure Low as support and Market Structure High as resistance
2)Trend line support & resistance
3)Pivot(Daily/Weekly/Monthly) support & resistance
4)Using Fibonacci tools as support & resistance
5)Median Line/Andrews Pitchfork as support and resistance
6)Gann levels as support and resistance.
Then decide which way suits most for the security based on your convenience and apply it in your strategy.
Support & resistance is generally arrived using technical analysis. And technical charts are based on statistical theories. Trading is all about psychology and not statistics. Statisticians are no good traders. Only plain chart studies like Price & volume action analysis are used by professinal traders. Use strategies based on plain chart analysis.
For truely 2D & 3D integrated trading techniques feel free to download 100% free professional intraday trading strategies here : http://intradaytradingsecrets.blogspot.in/
very simple answer just go to chart and active pivot points.and there u go ur resistance and support .easy
@Karthik,
What exactly do you mean different perspective?
Are you talking about option pricing? If not charts what to follow for options?
From the perspective of Option Greeks 