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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
A price level where a stock tends to stop falling and bounce back up.
Why It Matters
Support levels are like floors - prices that stocks struggle to fall below. If Apple has bounced off $170 three times, $170 is a support level. Traders use support to set buy targets and stop losses. When support 'breaks,' it often signals more downside ahead. Once broken, old support can become new resistance.
Key Points
- The more times a support level holds, the stronger it's considered
- Round numbers ($100, $50, $200) often act as psychological support/resistance
- Support can form from previous lows, moving averages, or trendlines
Related Terms
Common Questions
A price level where a stock tends to stop falling and bounce back up. Support levels are like floors - prices that stocks struggle to fall below. If Apple has bounced off $170 three times, $170 is a support level.
Support levels are like floors - prices that stocks struggle to fall below. If Apple has bounced off $170 three times, $170 is a support level. Traders use support to set buy targets and stop losses. When support 'breaks,' it often signals more downside ahead. Once broken, old support can become new resistance.
The more times a support level holds, the stronger it's considered
Round numbers ($100, $50, $200) often act as psychological support/resistance
Support can form from previous lows, moving averages, or trendlines