This master's thesis is based on study of technical analysis of financial markets, i.e. analysis of dependencies between past and present price data, especially when it comes to supports and resistances or historical price levels where price recently tended to stop and reverse. First of all, summary of the most relevant literature on technical analysis is presented, together with literature on psychology of investing, behavioral finance and market efficiency. Following that, theoretical arguments in favor of possible edge in trading of technical levels are introduced and possible objections...