Support (technical analysis)

From Free net encyclopedia

The support level is the lowest price a security trades at, over a period of time. The longer the price stays at a particular level, the stronger the support at that level. Some traders believe that the stronger the support at a given level, the less likely it will break below that level in the future.

It is said that if a security breaks prior levels of support only by a small portion, it will drop sharply until a new level of support is reached.

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