Definition: Support is a price level where a stock tends to stop falling and may start to bounce back up. It acts like a “floor” for the stock’s price.
Why It Happens: At the support level, there is typically enough buying interest to prevent the price from falling further. Buyers are more willing to purchase the stock at this level, creating demand.
Example: If a stock has consistently bounced back up every time it hits $50, then $50 is considered a support level.
Leave a Reply