Support and resistance are the backbone of technical analysis — understanding them alone sharpens your timing.

Support

A price level where a falling stock tends to stop and bounce, because buyers find it attractive — a "floor".

Resistance

A level where a rising stock tends to stall and pull back, because sellers step in — a "ceiling".

How to draw them

Find prices the stock bounced from or stalled at more than once. The more tests, the stronger the level.

Trading them

  • Buy near support with a stop just below.
  • Take profit near resistance, or wait for a strong breakout.
  • Breakout: broken resistance often becomes new support (and vice-versa).