  Technical trading represents a class of investment strategies for Financial
Markets based on the analysis of trends and recurrent patterns of price time
series. According standard economical theories these strategies should not be
used because they cannot be profitable. On the contrary it is well-known that
technical traders exist and operate on different time scales. In this paper we
investigate if technical trading produces detectable signals in price time
series and if some kind of memory effect is introduced in the price dynamics.
In particular we focus on a specific figure called supports and resistances. We
first develop a criterion to detect the potential values of supports and
resistances. As a second step, we show that memory effects in the price
dynamics are associated to these selected values. In fact we show that prices
more likely re-bounce than cross these values. Such an effect is a quantitative
evidence of the so-called self-fulfilling prophecy that is the
self-reinforcement of agents' belief and sentiment about future stock prices'
behavior.

Statistical Finance;Trading and Market Microstructure