What Is Support And Resistance?
The concepts of trading level support and resistance are undoubtedly two of the most highly discussed attributes of technical analysis. Part of analysing chart patterns, these terms are used by traders to refer to price levels on charts that tend to act as barriers, preventing the price of an asset from getting pushed in a certain direction.
Support:
Support is a price level where a downtrend can be expected to pause due to a concentration of demand or buying interest. As the price of assets or securities drops, demand for the shares increases, thus forming the support line. This is also called as "Floor". The support level is always below the current market price.
Resistance:
Resistance is a price where an uptrend can be expected to pause due to a concentration of supply or selling interest. As the price of assets or securities rises, supply for the shares increases, thus forming thee resistance line. This is also called as "Ceiling". The resistance level is always above the current market price.
