Support and Resistance

Support and resistance are key concepts in trading and investing. Support is a price level where a stock or asset tends to find buying interest, preventing it from falling further. Think of it as a floor that holds the price up. Resistance, on the other hand, is a price level where selling interest increases, preventing the price from rising further—like a ceiling. These levels are formed by previous market activity and trader behavior. Recognizing support and resistance helps traders anticipate potential reversals or breakouts, making it useful for making informed decisions.