Definition
Support is a price level where buying interest has historically been strong enough to halt a decline; resistance is a level where selling interest has historically been strong enough to halt an advance. Together they form the horizontal scaffolding on which most technical analysis is built — the prices where supply and demand have repeatedly come into balance.
These levels are not magic numbers. They are simply zones where many traders remember a prior turning point and act on that memory. A floor that has held three times becomes a focal point: buyers expect it to hold again, and their expectation, acted on, helps make it hold.
Why it matters
How it works
Analysts identify these levels by marking the highs and lows where price previously reversed. A move that pushes decisively past a level — ideally on rising volume — is read as a breakout, signalling that the prior balance of supply and demand has shifted. After such a break, price frequently returns to retest the former level from the other side: this role reversal is one of the most-watched behaviors in technical analysis.
Because the levels reflect collective expectation rather than a physical constraint, they can and do fail. Their value lies in giving the trader a structured place to define entries, stops, and targets.