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Academy/Analysis 101/Support & Resistance
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Lesson 1 of 3

Support & Resistance

The floor and the ceiling

Prices rarely move in a straight line. They bounce.

Support (The Floor): Price level where a stock has trouble falling below. Buyers step in here. It's like a trampoline!

Resistance (The Ceiling): Price level where a stock has trouble rising above. Sellers step in here.

Strategy:

  • Buy at Support
  • Sell at Resistance

If price breaks through resistance, that "ceiling" often becomes the new "floor" (support)!