Support Level

A price level where a stock tends to stop falling and bounces back up.

What Is a Support Level?

A support level is a price level where a stock has historically stopped falling and bounced back upward. It occurs because buying interest concentrates at that price — enough buyers step in to prevent further decline.

Why Support Works

Support levels work because of collective market psychology. When a stock falls to a price where it previously bounced, buyers remember that level. Some set buy orders there, others see it as a bargain opportunity, and short sellers take profits. This concentrated buying pressure creates a "floor" under the stock.

Types of Support

• Horizontal support: A flat price level where the stock has bounced multiple times.
• Dynamic support: A moving average (like the 50-day or 200-day) that rises over time.
• Trendline support: A diagonal line connecting higher lows in an uptrend.

When Support Breaks

When a support level fails to hold, it often becomes a new resistance level. This "role reversal" is one of the most reliable patterns in technical analysis. A break below support, especially on high volume, is a bearish signal that can trigger accelerated selling.