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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
Price levels where stocks tend to stop falling (support) or stop rising (resistance).
Why It Matters
Support and resistance are like floors and ceilings for stock prices. If Apple has bounced off $150 three times, $150 is support - buyers step in there. If it's failed to break $200 repeatedly, $200 is resistance - sellers appear. Traders use these levels to time entries and exits. When support breaks, it often becomes resistance, and vice versa.
Key Points
- Support: Price floor where buying pressure exceeds selling pressure
- Resistance: Price ceiling where selling pressure exceeds buying pressure
- Breakouts above resistance or below support often lead to big moves
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Common Questions
Price levels where stocks tend to stop falling (support) or stop rising (resistance). Support and resistance are like floors and ceilings for stock prices. If Apple has bounced off $150 three times, $150 is support - buyers step in there.
Support and resistance are like floors and ceilings for stock prices. If Apple has bounced off $150 three times, $150 is support - buyers step in there. If it's failed to break $200 repeatedly, $200 is resistance - sellers appear. Traders use these levels to time entries and exits. When support breaks, it often becomes resistance, and vice versa.
Support: Price floor where buying pressure exceeds selling pressure
Resistance: Price ceiling where selling pressure exceeds buying pressure
Breakouts above resistance or below support often lead to big moves