Support and Resistance

Support and Resistance are core concepts in technical analysis used to identify key price levels where the market tends to react.

Support

Support is a price level where buying interest is strong enough to stop or slow down a price decline.

At support:

• Demand > Supply
• Price often bounces upward
• Buyers consider the price “cheap” or attractive

Resistance

Resistance is a price level where selling pressure is strong enough to stop or slow down a price increase.

At resistance:

• Supply > Demand
• Price often pulls back downward
• Sellers consider the price “expensive”

Why Support & Resistance Matter

They help traders:

• Identify entry points (buy near support, sell near resistance)
• Set stop-loss and take-profit levels
• Understand market psychology
• Anticipate breakouts or reversals

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Key Characteristics

• Support and resistance are zones, not exact lines
• Old support can turn into resistance, and vice versa
• Stronger when tested multiple times
• More reliable on higher timeframes