Technical analysis · updated October 21, 2026
What are support and resistance in technical analysis
Support is a price level where a stock has stopped falling several times, because many buyers showed up there. Resistance is the level where it has often stopped rising, because many people sold there. On a chart they show up as horizontal lines the price touches again and again.
How it works
Look on the chart for prices where the stock turned around at least two or three times. Lows that repeat at the same level form support, highs that repeat form resistance. The more times a level has been hit, and the bigger the volume, the more closely it is watched. Round numbers ($100, $50) and the year's high or low often become such levels.
Worked example
A stock has dropped to $40 three times and climbed to $52 twice, without breaking through either.
If the price breaks above $52 on heavy volume, many investors see the start of a new rise, and the old resistance often becomes support.
Worth knowing
A broken level often swaps roles: resistance that is cleared becomes support, and support that gives way becomes resistance.
When support and resistance can fool you
They are not exact lines: they are zones a few dollars wide, not a fixed price. False breakouts: the price often pokes slightly through a level and comes straight back. They say nothing about the business: a stock can break through any support if the company has real problems.
Related terms
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Questions about support and resistance
Why do support and resistance sometimes work?
Because many investors watch the same levels and place buy or sell orders there. Their shared behaviour makes the level matter.
Where do I put a stop-loss relative to support?
Many people put it a little below support, so a simple touch of the level does not trigger it. It is a rule of thumb, not a guarantee.
These explanations are for information only. They are not a recommendation to buy or sell.
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