support level

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Support level

A price level below which it is supposedly difficult for a security or market to fall. That is, the price level at which a security tends to stop falling because there is more demand than supply; can be identified on a technical basis by seeing where the stock has bottomed out in the past.


In technical analysis, a price that a security does not or only rarely falls below. Technical analysts identify a support level by looking at past performance. It is seen as an indication to buy the security, which will increase the demand, causing the security's price to move above the support level. The demand comes from investors who fail to buy the security at the support price, and resolve to do so if it reaches that price again. If buyers are not forthcoming, however, the security falls below the support level. When this occurs, the price of the security will likely continue to drop until it finds another support level. See also: Price floor, Resistance (Resistance level).

support level

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support level
A price at which a security or the market will receive considerable buying pressure. Technical analysts believe demand at the support level will tend to keep a stock's price from falling below the support-level price. A support level develops as investors miss purchasing a stock just before a price rise and resolve to buy the stock if it again reaches that level. Compare resistance level.
References in periodicals archive ?
Support and resistance can be found on charts on multiple time frames and many different forms.
To determine horizontal support and resistance levels on your charts, find a level where there is a significant amount of overlapping price action.

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