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.
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.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.