Support and Resistance
Price levels where buying or selling has repeatedly stalled a move, marking floors and ceilings on a chart.
Support is a price where buyers have stepped in before, putting a floor under a falling market. Resistance is the mirror, a ceiling where sellers have repeatedly capped a rally. Traders draw these levels from past turning points and watch how price behaves as it returns to them.
The levels work partly because so many people watch them, which makes them self-reinforcing. A break through resistance often turns that old ceiling into new support, and vice versa. They aren't precise lines so much as zones, and the more times a level holds, the more weight traders give it, until it finally snaps.
Related terms
A line that averages price over a set period, smoothing noise to reveal the underlying trend.
CandlestickA chart symbol showing an asset's open, close, high, and low for a given time period.
BullishDescribes an expectation that a price will rise, or a trader positioned to profit from gains.
BearishDescribes an expectation that a price will fall, or a position set up to gain when it does.