The concepts of "support and resistance" > The concepts of support and resistance are among the most important in technical analysis.
They represent psychological barriers that can impede a stock's move, but can also be utilized to anticipate new information. When making a visual assessment of a stock chart, a solid understanding of support and resistance can help investors determine entry and exit points for profitable trading. http://www.stockscores.com/basics.asp?essayid=4 Support
Simply, support is a floor price that the market for a stock has shown a hesitation to break through in the past. The more times a stock touches this floor price, the stronger the support is said to be. It can be defined by a low point in trading, or by a period of price consolidation. Example: