Resistance Level

A price level where a stock tends to stop rising and pulls back.

What Is a Resistance Level?

A resistance level is a price where a stock has historically stopped rising and pulled back. It acts as a "ceiling" that the stock struggles to break through, because selling pressure concentrates at that price.

Why Resistance Works

Resistance forms for the opposite reasons as support. Sellers who bought at higher prices may want to "break even" and sell when the stock returns to their entry price. Other traders see the level as a good place to take profits. Short sellers may initiate positions at resistance levels, adding selling pressure.

Breakout Above Resistance

When a stock finally breaks above a resistance level, especially on high volume, it's one of the most bullish signals in technical analysis. The former resistance often becomes new support, and the breakout can trigger a powerful upward move as short sellers cover and new buyers rush in.