The term support refers to a price point below which movement is impeded by the economic law of supply and demand. A support price point is identified through many observations and typically occurs over an extended period.
The downward price movement of a security or market will normally reach a point at which it demonstrates significant resistance to additional downward movement. When the price of a security reaches this point, investors will purchase the security, thereby providing support and preventing a further decline in price. If this occurs on a number of occasions over time, the support level is said to be confirmed. If the price of a security falls below this support level, it will likely continue to decline until it reaches another support level. Resistance is the converse of support, since it's a price point above which the law of supply and demand limits additional upward movement.
Support and resistance price points are associated with technical analysis of stocks, since the focus is more on price trends than the fundamental fiscal health of the company. When a stock appears to be bound by support and resistance levels, technical analysts will adopt a strategy of buying a stock when it reaches its support price point and selling the stock when it reaches its resistance price point.
liquid market, resistance, leg, breakout, pin risk
Explore Investing Further
Trading has never been easier, thanks to the rise of online platforms that enable you to buy and sell various assets at the click of a button. But with so many options available, it can be challenging to decide which platform is right for you.
Looking for a way to avoid swap fees while trading forex?
Below listed are the small reviews of the top 10 ETF brokers available across the United States.
Our top beginner's pick for copy trading is eToro. Read on for more details, plus seven good alternatives.
Swing trading stocks can be a great way for investors to take advantage of short-term stock market movements and gain significant returns. If you're interested in swing trading, the key to success lies in selecting the right stocks to buy and sell quickly for a profit.
The table below lists the best stock picks under $2, listed on public exchanges.
The table below lists the best stock picks under $1, listed both on public and OTC exchanges.
This section will highlight the best EV-trading penny stocks available in the United States.
The demand for sustainable energy has grown rapidly in recent years. This has resulted in increased scrutiny of the automotive market. As a result, the electric vehicle (EV) industry has made significant advancements.
Intelligent Bio Solutions Inc. is a life sciences company, founded in 2016 with headquarters in New York and is engaged in performing diagnostic tests, real-time monitoring, and non-invasive surgery for its patients. The firm has developed a CoV-2 Biosensor, which can be used in RNA virus detection.
Hour Loop was founded in 2013 with headquarters in Redmond, Washington. It’s an online retailer involved in e-commerce in the United States that hit the public markets on Jan 7th of 2022. The company sells home/garden decor, electronic products, kitchenware, and apparel through walmart.com, amazon.com, and hourloop.com.