VERB support and resistance

In the context of the financial markets, "support" and "resistance" are key terms used in technical analysis to describe specific price levels where supply and demand are expected to meet. These terms are particularly relevant when analyzing stocks or other securities.

Support: Support refers to the price level at which demand is strong enough to prevent the price from declining further. When a stock's price falls to a support level, it is believed that buyers become more inclined to buy, while sellers become less inclined to sell. If the price reaches or breaks below support, it may indicate a shift in market sentiment, potentially leading to further price declines.

Resistance: Resistance, on the other hand, is the price level where an uptrend is expected to pause temporarily due to a concentration of demand. When a stock's price rises to a resistance level, it suggests that sellers may become more active, potentially slowing down the uptrend. If the price manages to break above resistance, it could signal a strong upward momentum and a potential continuation of the trend.

It's important to note that support and resistance levels are not fixed and can change over time based on market dynamics. Traders often use these levels to identify potential entry or exit points in their trades, as well as to confirm trend reversals. Understanding support and resistance is a fundamental aspect of technical analysis, and mastering their application can be valuable for traders in the financial markets.