What are Supports and Resistances?

Supports and resistances are two of the most important concepts in the technical analysis of stock markets. They refer to price levels at which the market either finds strong support or encounters strong resistance and in turn, are used to predict potential price movements. These two terms are so important in the stock market because they can provide investors with valuable insights on how to buy and sell stocks.
In this article, we will cover the definition of supports and resistances, as well as how to identify them and their benefits. We will also discuss common mistakes to avoid when identifying supports and resistances, and provide a summary of the article. Starting with the definition of supports and resistances, they can be defined as price points that the market either finds strong support or encounters strong resistance. When the price reaches a support level, it is said to be “supported” and when it reaches a resistance level, it is said to be “resisted”. This means that the price is likely to find support or resistance at certain levels and as a result, investors should watch for these levels when analyzing the price of a stock.
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