Support, also called a support level, is the price index below which an asset doesn’t fall for an extended period. When an asset’s price drops to a lower level, buyers enter the market, creating a support. The support level price is often tracked in technical analysis by drawing a line round the lowest lows for the period in question. With the general price movement, the support line will be flat or inclined up or down. More advanced variations of support may be identified using other technical indicators and charting approaches.
The terms means that the price at which buyers are able to shop for or sell a stock. It refers to a company’s stock price that rarely falls below a particular threshold. When a stock’s price falls toward its support, the level either holds and is confirmed, or the stock continues to fall, requiring the previously established price to be adjusted to accommodate the new lows.
Technical analysis revolves around support and resistance levels. Fundamental analysis considers a company’s performance and history when predicting the stock’s future direction, whereas technical analysis looks at price patterns and trends. Traders utilize support and resistance levels to work out when to enter and leave trades. Reckoning on what the trader sees from other indicators, a breach of support levels on a chart is considered as a chance to shop for in or take a brief position. If the breach occurs during an uptrend, it could signal a trend reversal.
