Technical analysts use various ideas to guess the future stock price in the market. You have to learn about trends and support, and resistance levels.
What is Support level?
This is a level at which the stock price is not going to move down any further. The stock price is likely to bounce back and move upward. Support is the level at which the buyers have more demand than sellers.
What is Resistance level?
A resistance level is opposite to a support level. It is a price point at which the stock price is not supposed to go upward. Here there are more sellers than buyers in the market for the specific stock.
Breakouts in levels
The support and resistance levels give the trader an idea about the stock price movement. However, the stock price may break throughout these levels. And when this happens, a new support and resistance level is formed.
If the support level is breached, the stock price will drop until it hits a new support level. And if the resistance level is breached, the stock price remains to increase until it strikes a new resistance level.
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