What is Support and Resistance?
Price levels where a stock tends to stop falling (support) or rising (resistance).
Formal Definition
Support is a price zone where buying interest has historically halted declines, while resistance is a zone where selling has capped advances. These levels form from prior highs, lows, and heavy trading. When price decisively breaks through, support can flip to resistance and vice versa, a cornerstone concept of technical analysis.
In Simple Terms
Support is a floor where buyers keep stepping in to stop a stock from falling further; resistance is a ceiling where sellers keep capping the rise. Prices often bounce between the two until one gives way.
Example
If a stock repeatedly bounces near $150 but stalls around $170, $150 is support and $170 is resistance.