Resistance and support levels

Resistance and support levels are important concepts in technical analysis. A resistance level is a horizontal trend line drawn from the share price highs as a share price has bounced back several times.

A share price have a hard time to pass a resistance level and when a share price passes a resistance, it may be time to buy shares.

A support level is a horizontal trend line drawn from share price bottoms as a stock price has bounced up several times. The share price have a hard time to pass a support level and when a share price passes a support level it may be time to sell your shares.