What Is Support and Resistance?
Support is a price level where downward movement tends to pause due to concentrated buying interest. Resistance is the opposite — a level where upward movement stalls because sellers step in. The mechanism is psychological as much as mechanical: traders who bought at a level want to defend it, and traders who sold there are reluctant to buy back higher.
Levels can be identified from prior swing highs/lows, round numbers ("100"), moving averages, Fibonacci levels, or previous breakout points. Strong levels are those tested multiple times without breaking.
A classic principle is that broken support becomes resistance (and vice versa). When price decisively breaks below support and later rallies back, that old support level often acts as new resistance — sellers who didn't exit earlier use the bounce as an exit point. This "polarity flip" is one of the most reliable structural patterns in technical analysis.
Related terms
- Breakout — A price move beyond an established support, resistance, or chart pattern boundary.
- Consolidation — A range-bound period of relatively quiet price action between trending moves.
- Trend — The general direction of price movement over a period — uptrend, downtrend, or sideways.