Trading Glossary

Resistance

A price level that acts as an overhead barrier to further price gains. Prices will frequently rally to these levels and then retreat. Resistance (like support) is rarely a specific price; it is more often a relatively contained price range, frequently in the vicinity of past technical patterns. One of the basic precepts of support and resistance is that once a support level is violated it becomes a likely new resistance level and when a resistance level is penetrated it becomes a new support level.

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