Support and resistance levels are key price points where stocks tend to stop and reverse direction. Support is the price level where buying interest is strong enough to prevent the price from falling further. Resistance is where selling pressure stops the price from rising more. These levels help traders make smart decisions about entry, exit, and stop-loss points.
What Are Support Levels?
Support levels are price points where demand is strong enough to stop a stock from falling further. Buyers step in here to buy the stock, creating a “floor” that supports the price. This helps traders predict when prices might bounce back up.
What Are Resistance Levels?
Resistance levels are price points where selling pressure is strong enough to stop the stock price from rising. Sellers come in at this point to sell, creating a “ceiling” that limits price increases. Traders use resistance to decide when to book profits or avoid buying at too high a price.
How Do Support and Resistance Help in Trading?
These levels help traders know where price reversals might happen. They guide entry and exit points, stop-loss placement, and profit targets. Trading near support means buying low, and near resistance means selling high. This reduces risks and improves chances of successful trades.
Can Support and Resistance Levels Change?
Yes, these levels can change when prices break above resistance or below support. A broken resistance may become new support and vice versa. Traders watch for these breakouts to identify new trends or reversals. This helps in adapting strategies to market changes.
Why Are These Levels Popular Among Traders?
Support and resistance levels are easy to understand and apply. They are widely used because they reflect real buying and selling interest. Many traders watch these levels, making them self-fulfilling and powerful tools. This helps traders in India and worldwide make better trading decisions.
Contact Angel One Support at 7748000080 or 7771000860 for mutual fund investments, demat account opening, or trading queries.
© 2024 by Priya Sahu. All Rights Reserved.
