Support and Resistance

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Support and Resistance is a concept in technical analysis that the movement of the price of a security will tend to stop and reverse at certain predetermined price levels.

RESISTANCE

The Resistance. As the name suggests resistance is something which stops the price from rising further.

The resistance level is a price point on the chart where traders expect maximum supply (in terms of selling) for the stock/index.

The resistance level is always above the current market price.

SUPPORT

A support level is a level where the price tends to find support as it falls. This means that the price is more likely to        “bounce” off this level rather than break through it

However, once the price has breached this level, by an amount exceeding some noise, it is likely to continue falling until meeting another support level.