Price areas where buying or selling pressure has historically been strong enough to slow or reverse a move.
How it works
Support and resistance identify zones where previous trading showed concentrated demand or supply. They are better treated as areas to observe than exact prices that must hold.
Example
A former high may become a reference area for buyers after price breaks above it and later returns.
Limitations
Levels are subjective, can fail without warning, and do not account for gaps or poor liquidity. Confirmation and predefined risk controls remain necessary.
Evidence LedgerHow this insight was built
Human reviewedThesis being tested
This definition explains Support and Resistance accurately, with its practical use and material limitations.
Key assumptions
- The named calculation or convention is stated where definitions vary.
- The example is illustrative and not a forecast or recommendation.
What could invalidate the view
- A different market, instrument, jurisdiction, or methodology may use the term differently.
- The cited authority may revise its guidance or terminology.
- Editorial ownership
- Market Master · reviewed
- Approval state
- Reviewed financial content
- Evidence currency
- Current evidence window
- Source coverage
- 2 documented sources
Sources used for this insight