Series 7: 9.4.2.2 Support And Resistance

9.4.2.2  Support and Resistance

Technical traders believe there are prices a stock may have difficulty pushing past. When a stock price is rising, it may hit a ceiling price called a resistance level that it will “bounce” off. At this price, traders will begin to sell off their holdings. Conversely, when the stock price is falling, it is likely to hit a support level or floor price. When a stock price is at its support level, we say that the stock is oversold and