Support and resistance are the floors and ceilings of a price chart — levels where buying or selling repeatedly shows up. They are the most fundamental idea in technical analysis and the backbone of most chart strategies.
Support is a price level where falling prices tend to stop and bounce — buyers consistently step in, forming a floor. Resistance is the opposite: a level where rising prices tend to stall and reverse as sellers appear, forming a ceiling. Both are core tools in technical analysis.
They are really a memory of crowd behavior. Buyers who missed a previous low place orders near it (creating support); traders who bought at a previous high want to sell at break-even when price returns (creating resistance). Round numbers and prior peaks act as psychological magnets.
When price pushes decisively through a level, it's a breakout — often a signal that the trend is accelerating. After a breakout the levels can flip roles: old resistance becomes new support, and old support becomes new resistance. This “role reversal” is one of the most reliable patterns traders watch.
Traders buy near support and sell near resistance, place a stop-loss just beyond a level so they exit cheaply if it breaks, and treat a clean breakout as an entry signal. Support and resistance pair naturally with moving averages and candlestick patterns for confirmation.
Spot the levels live: reading bounces and breaks is a trained eye. Practice calling the next move off the chart in the up/down prediction game.
Not advice: educational content only. For authoritative basics see the SEC at investor.gov.
Related: technical analysis basics, how to read stock charts, and moving averages explained.
Support is a price floor where falling prices tend to bounce because buyers step in; resistance is a ceiling where rising prices tend to stall because sellers appear.
They reflect crowd memory: buyers place orders near prior lows and sellers near prior highs, while round numbers and previous peaks act as psychological reference points.
A breakout is when price pushes decisively through a support or resistance level, often signaling the trend is accelerating in that direction.
After a breakout, levels can switch roles: broken resistance often becomes new support, and broken support often becomes new resistance.