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Resistance

POSTED ON JUNE 04, 2021    

How finance folk use it

Resistance is the price point that an asset has a hard time (or encounters “resistance”) exceeding, as investors tend to sell once the value goes past it. It is measured over a period of time and is also called the resistance level.

 

In the stock market, resistance is the price level at which people tend to start selling shares of the company.

 

Is it good or bad?

When you know an asset’s resistance level, you have an indication of the highest limit of the asset. This can help you understand the historical price movement and could also be a way for you to determine if you should sell or hold.

 

Support and resistance are concepts that are applied to indexes as well as individual assets.

 

What it means for you

The resistance level of an asset or of an index may be useful for you to forecast the next price movements, although you should also look at other factors such as company performance and news.

 

Don’t forget that both support and resistance are not set in stone, and these may change according to factors like industry developments and investor confidence.

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