A support line is like an imaginary line where the share price has hit at least twice. The line becomes more important when it has been unable to pass through in a downward trend. In psychological terms this occurs because demand for the stock increases and pushes prices back at the same psychological price.

The picture below demonstrates where the share price has bounced at least twice at the same price. Sometimes it is not exactly the same price but close enough.

 

 

 

A Resistance line is like an imaginary line where the share price has hit at least twice. The line becomes more important when it has been unable to pass through in an upward trend.

The picture below demonstrates where the share price has bounced at least twice at the same price. Sometimes it is not exactly the same price but close enough.

 

Support and Resistance Video