Technical analysis
Support and resistance
Support is a price level where declines tend to stall; resistance is a level where rises tend to stall.
Support is a price level where declines tend to stall; resistance is a level where rises tend to stall.
Support and resistance are price levels where the market has reversed direction in the past. At support, enough buyers step back in to halt a decline. At resistance, enough sellers appear to halt a rise. These are zones, not exact lines.
Traders use them to decide where to enter, where to place a stop, or where to aim an exit. When a price clearly breaks above resistance, that level often becomes new support, and vice versa.
A stock bounces three times around $45 without going lower: $45 acts as support. It also stalls several times near $55: $55 acts as resistance.
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