Resistance

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Resistance

An effective upper bound on prices achieved because of many willing sellers at that price level.

Resistance Level

In technical analysis, a price that a security does not, or only rarely, rise above. Technical analysts identify a resistance level by looking at past performance. When the security approaches the resistance level, it is seen as an indication to sell the security, which will increase the supply, causing the security's price to fall back below the resistance level. If there are too many buyers, however, the security rises above the resistance level. When this occurs, the price of the security will likely continue to rise until it finds another resistance level. It is also called the overhead resistance level. See also: Price ceiling, Support (Support level).

resistance

An increased supply of a security. Compare support.

Resistance.

Resistance, or resistance level, is the top of a stock's current trading range, and the point at which the price is higher than investors are willing to pay. As stockholders sell at resistance level, the stock price goes down because supply exceeds demand.

For example, if, on a repeated basis, as stock A's price reaches $60, stockholders begin to sell, then $60 is considered its resistance level. But a trading range isn't fixed and investor attitudes change, so the resistance level tends to move higher or lower over time.

If stock A rises to $63 without a surge of selling, the current resistance line has been breached. This may be the result of a rising market or a bullish assessment of the stock's value. On the other hand, if selling increases at $57, that may become the new resistance level.

Conversely, the level at which demand exceeds supply and investors typically buy a certain stock is called support. It's the point that's considered the bottom of a stock's current trading range.

Technical analysts use the concepts of resistance and support in anticipating future stock price movements.

References in periodicals archive ?
As the lava crept down the slope, its front hardened where it hit thick, glacier-filled valleys, forcing the lava to flow along the line of least resistance, usually the ridges between the valleys.
Writer-helmer also plays the lead role of Jonas, who, as is made clear in an opening photo montage, hasn't had much luck with women and always takes the line of least resistance when confronted with a problem.
If the curtain is disturbed and is made heavier at one end and thinner at the other, the air follows the line of least resistance and passes through the thin curtain area [ILLUSTRATION FOR FIGURE 5 OMITTED].
It is always possible, and often the case, that we will choose to follow the line of least resistance and not respond to the "moment of grace.
With no ready sellers awaiting further advances, the line of least resistance for KGC is higher yet.