Support levels are crucial for identifying optimal entry points for trades. Traders can look for buying opportunities when an asset’s price approaches a known support level, anticipating a bounce back.
Conversely, support can serve as a guide for setting exit points. Traders may choose to sell near a support level if they believe it is likely to break, preventing further losses.

In the previous blog post (link), attention was drawn to the support level at 825 for PayTM. Unfortunately, on December 6th, this support level was broken, leading to a notable downturn today on 7 December i.e. -18% in the stock’s value. This development serves as a stark reminder of the practical implications of understanding and respecting support levels in trading.

The recent decline in PayTM highlights the role of support levels in risk management. By acknowledging and respecting these levels, traders can set stop-loss orders strategically, limiting potential losses in the event of a breakdown.