SUPPORT & RESISTANCE
Support and resistance are two key concepts in technical analysis that help traders identify potential buy and sell levels in the stock market.
Support refers to a level at which the stock price has historically had difficulty falling below. It is a price level where there is enough buying pressure to counteract selling pressure, preventing the price from falling further. Support levels are often seen as opportunities to buy or accumulate a stock, as the demand for the stock is likely to increase at these levels.
Resistance, on the other hand, refers to a level at which the stock price has historically had difficulty rising above. It is a price level where there is enough selling pressure to counteract buying pressure, preventing the price from rising further. Resistance levels are often seen as opportunities to sell or exit a stock, as the supply of the stock is likely to increase at these levels.
Both support and resistance levels can be identified by looking at historical price data and chart patterns. Traders use technical analysis tools such as trend lines, moving averages, and chart patterns to identify these levels and make trading decisions based on them. However, it is important to note that support and resistance levels are not always precise and can be broken, leading to a trend reversal.
