What is The Support?

In the stock market, support refers to a price level that a particular stock or index has difficulty falling below, as it is seen as a level where buying pressure outweighs selling pressure. Support levels are usually identified by technical analysts by examining historical price data and looking for patterns where the price has previously bounced back up from a certain level.

Support levels are considered to be significant because they can provide useful information for traders and investors in determining when to buy or sell a particular stock. When a stock price approaches a support level, traders may look for signs of a potential rebound or reversal in trend. Conversely, if a stock breaks below a support level and continues to move lower, this could be a signal for traders to sell or short the stock.

It`s important to note that support levels are not always absolute and can be breached if there is a significant shift in market sentiment or a fundamental change in the company`s financial position. Additionally, traders should always consider other technical indicators and market factors before making any trading decisions based solely on a support level.