How to Adjust Price Levels When Declining Towards Forecast: Mon Mar 3 2025

Right before Nvidia reported earnings last Wed Feb 26, I shared chart analysis and a forecast for it. The stock still happens to be headed toward that forecast, so I saw a great opportunity to show you how I update support and resistance levels on the way!

You can view this explainer video and/or scroll down for the process steps:

If you’ve developed forecasting skills like those I teach in my Lost Forecasting Trading System, this may have happened to you already—or it will in the future. Below are steps extracted from the video explainer on how to keep your charts updated and ensure your support and resistance levels remain relevant when the market is trading DOWN towards a forecast.

Step 1: Identify Outdated Support and Resistance Levels

When I first created the forecast, I identified support within the range of the week ending February 7th. However, since we’ve now broken below that low, that level is no longer valid.

What to Do:

• Remove support or resistance levels that have been violated.
• If price trades through a support level, it’s no longer support.
• If price trades above a resistance level, it’s no longer resistance.

I often see traders holding onto old levels on their charts, which can create confusion during subsequent trading sessions. If a support or resistance level is broken with a daily candle closing past it, remove it from your chart.

Step 2: Identify New Key Levels from the Higher Timeframe Chart

Once outdated levels are removed from the daily chart, it’s time to look at the higher timeframe chart (weekly) to identify what’s next.

How to Do It:

1. Look at past price action – Find key levels from prior weeks that align with current movements.
2. Compare historical highs and lows – For example on NVDA, the week ending August 9th had a high that coincided with the 50% retracement of the week ending September 6th. That gives us an area of potential support around 108.
3. Mark new resistance levels – The week ending February 21st has now established itself as a key resistance level.

Once these levels are identified, we can move down to a lower timeframe to refine them further.

Step 3: Adjust Levels on the Daily Chart

The yellow vertical line on my chart in the video represents the day I made the forecast. At that point, none of the downside had unfolded yet. So next you need to clean up and refine your charts.

Process for Updating Support and Resistance on the Daily Chart:

1. Dial back to the date you last took action – This is when you initially made your forecast or took a trade.
2. Look at the next session’s candle – Identify if it closed through a support or resistance level.
3. Remove outdated levels – If a support was broken on a daily close, take it off your chart.
4. Repeat for each session – Continue removing levels that are no longer relevant.

For example:

• The day after my forecast, support was violated → remove it.
• The next day, another level was broken → remove it.
• Continue this process until only valid support and resistance remain.

Once this is done, we can now turn to refining resistance levels.

Step 4: Identify and Set Resistance Levels

To find valid resistance:

1. Go to the furthest right completed candle – If using a daily chart, do this after the market closes.
2. Go back one bar at a time – Look for a price high that has a lower bar high on both sides.
3. Mark significant resistance levels – These will be areas where price may struggle to break through in the future.
4. (Optional) Set alerts – If using TradeStation (or another platform), set alerts for key resistance levels if you want.

For example:

• 135.01 was a resistance level from February 27th.
• If price revisits that level, we expect sellers to emerge.
• If price blasts above it, it signals a potential trend shift.

Step 5: Refining Resistance Levels with Intraday Charts

Now, let’s take it a step further by dropping down to a 60-minute chart to uncover more nearby resistance levels for shorter-term trading.

How to Do It:

1. Change to a 60-minute timeframe – Most platforms allow quick adjustments.
2. Repeat the right-to-left analysis – Find resistance swing highs on this timeframe.
3. Mark significant resistance areas:
   • Example: 117.62 emerged as an intraday resistance level.
   • For major swings, mark the entire range, the midpoint, and the prior low.
4. Use alerts – Set alerts for significant levels to monitor potential reversals.

By doing this, we now have more refined resistance levels to manage trades effectively.

Step 6: Monitor RSI Power Zones and Trend Continuation

While updating support and resistance, don’t forget about momentum indicators like the RSI Power Zones.

Key RSI Power Zones Observations:

• The RSI Power Zones hit extremely oversold conditions on February 25th (reading of 16.37).
• It rebounded towards the Bear Resistance Power Zone, consolidated, then dropped again.
• This does not guarantee the price trend will stay down—monitor the trend continuously.

When is the Forecast Still Valid?

• As long as price remains beneath 143.44, the forecast I shared on Feb 26th remains intact.
• Use new resistance levels to manage profit-taking on bearish trades.
• If price accelerates downward, trail stops to lock in profit.

Final Thoughts

Updating support and resistance levels is a crucial skill in trading. Whether or not you trade Nvidia, this lesson applies across all markets:

• Always remove outdated levels.
• Reassess key levels using higher time frames.
• Refine entries and exits with intraday charts.
• Use alerts to stay ahead of price moves.
• Monitor RSI Power Zones and price action for confirmation.

If you found value in this lesson, make sure to drop a like, subscribe to my YouTube channel, and leave a comment with your thoughts!

~Hima