Google Finance: SRSR Analysis Tool

Google Finance offers a range of tools for investors, and one particularly useful but often overlooked feature is its support for identifying potential Support and Resistance (SR) levels using automated algorithms. While not explicitly labelled as “SRSR” (Support, Resistance, Support, Resistance), Google Finance’s charting capabilities and available indicators can be leveraged to approximate a similar type of technical analysis.

The core concept behind SRSR analysis is that price levels where a stock or other asset has historically found either buying support or selling resistance tend to repeat themselves. Support levels represent prices where buying interest is strong enough to prevent further declines, while resistance levels represent prices where selling pressure overcomes buying interest, capping upward movement. The “SRSR” pattern suggests that these levels, once broken, can often switch roles – a previous resistance level can become a support level, and vice versa.

To use Google Finance for SRSR-like analysis, follow these steps:

1. Access Google Finance: Navigate to Google Finance and search for the stock or asset you want to analyze.
2. Chart View: Ensure you’re in the chart view. You can adjust the timeframe of the chart (daily, weekly, monthly) to best suit your trading or investing style. Longer timeframes provide a broader perspective on historical price action.
3. Identify Obvious Levels: Visually inspect the chart for areas where the price has repeatedly bounced off a particular level (support) or failed to break above a certain level (resistance). Look for distinct peaks and troughs in the price movement. Draw horizontal lines using drawing tools (if available; functionality may vary).
4. Consider Moving Averages: Utilize moving averages (e.g., 50-day, 200-day) as dynamic support and resistance. A rising moving average often acts as support during an uptrend, while a falling moving average can act as resistance during a downtrend. Google Finance provides built-in moving average indicators you can add to the chart.
5. Fibonacci Retracements: While not directly SRSR, Fibonacci retracement levels can identify potential areas of support and resistance based on mathematical ratios derived from the Fibonacci sequence. Add this indicator to the chart to see if these levels align with previously identified areas of support or resistance.
6. Volume Analysis: Volume can confirm the significance of support and resistance levels. High volume trading activity around a specific price level suggests stronger conviction and a higher probability that the level will hold or break. Look for volume spikes associated with price bounces (support) or price rejections (resistance).
7. Interpret the Breaks: When a price breaks through a support level, it suggests weakening buying interest and potential for further downside. Conversely, a break above a resistance level indicates strengthening buying pressure and potential for further upside. Observe the volume during breakouts to assess the strength of the move.

Limitations: It’s crucial to understand that identifying SRSR levels, whether manually or using tools like those available on Google Finance, is not a foolproof science. Technical analysis is subjective, and support and resistance levels are not always precise lines in the sand. False breakouts and breakdowns can occur. Furthermore, Google Finance’s algorithmic support for this specific type of analysis isn’t heavily promoted and often requires a manual, visual approach by the user. Always combine technical analysis with fundamental analysis and risk management techniques before making any investment decisions.