Support and Resistance Explained

Support and resistance are price levels where a stock has repeatedly struggled to fall below or rise above. They are the foundation of most technical analysis.

What they mean

• Support is a floor — a level where buying tends to appear and halt a fall.
• Resistance is a ceiling — a level where selling tends to appear and cap a rise.

These levels form because traders remember past prices and act around them. The more times a level holds, the more significant it is considered.

How traders use them

• Entries and exits — buying near support, selling near resistance.
• Stop-loss placement — just beyond a level, so you exit if it breaks.
• Breakouts — when price decisively clears a level (ideally on high volume), it can signal a new move. A broken resistance often becomes new support (a “role reversal”).

Keep it simple

Draw levels on obvious swing highs and lows — don’t over-complicate the chart. Combine support/resistance with trend and a risk plan.

Levels are zones, not exact lines, and they don’t always hold. This is education, not advice.