Support Resistance Algorithm - Technical analysis

Question

I have an intra-day chart and I am trying to figure out how to calculate support and resistance levels, anyone knows an algorithm for doing that, or a good starting point?

Answer 1

If you are looking for horizontal SR lines, I would rather want to know the whole distribution. But I think it is also a good assumption to just take the max of your histogram.

# python + pandas

spy["Close"][:60].plot()
hist, border = np.histogram(spy["Close"][:60].values, density=False)
sr = border[np.argmax(hist)]
plt.axhline(y=sr, color='r', linestyle='-')

You might need to tweak the bins and eventually you want to plot the whole bin not just the lower bound.

lower_bound = border[np.argmax(hist)]
upper_bound = border[np.argmax(hist) + 1]

PS the underlying "idea" is very similar to @Nilendu's solution.