What Is Support And Resistance?

Concept of Support and Resistance

 
This is a concept in technical analysis that says that the price of a
stock tends to stop and move in the opposite direction when it hits certain
pre-determined price points.
 
Support level: This is a level at which the price of a stock does not fall
down any further. The price is likely to bounce back and moves up in the
opposite direction. This is a level where the demand from buyers is
expected to be much higher than that of sellers. Understanding support
levels on a candlestick chart can help us identify target price to either buy
or sell. Support price is the price at which we can expect more buyers than
sellers. Support level is the price on the chart, when traders can expect a
maximum demand for a stock, in buying terms, coming its way.
 
Resistance level: A resistance level is the opposite of a support level. It is
a price point (ceiling) at which the stock price is not expected to rise any
higher. This is a price point at which there are more sellers than buyers in
the market for the particular stock. The resistance level on a candlestick
chart is the price when we can expect more sellers than buyers. It prevents
the price from rising further and resistance level indicates a price point on
the chart when traders expect a maximum supply, in selling terms, for a
particular stock.