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Support

A price area where buying has previously stopped a decline and may do so again.

Support, resistance and the flip between themA price path bouncing three times off a horizontal support line and turning back three times at a resistance line, then breaking above it and settling back onto the same level.RESISTANCESUPPORT62.0056.00breaks aboveold resistance,now supportIllustrative price path: the level stays the same, its role changes.
Support, resistance and the flip. Support is a price where buyers keep stepping in and the fall stops; resistance is a price where sellers keep stepping in and the rise stops. Once price closes above an old ceiling, that same level often acts as the new floor.

Support is an area, not a line. It forms where price bounced before, where a large moving-average sits, or where heavy volume traded in a volume-profile. The more times a level holds, the more traders watch it, which is part of why it holds.

When support breaks, it frequently flips to become resistance on a retest. When it holds, traders often place a stop-loss just below it.

Example: a stock has bounced from $95 to $97 three times over two months. That zone is support. A close at $93 breaks it and a rally back to $96 that fails is the retest.

Related: resistance, retest, breakout, stop-loss, volume-profile

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