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Support

POSTED ON JUNE 04, 2021    

How finance folk use it

Support, also known as support level, is the price that an asset does not drop below for a period of time. In the stock market, it is the price level at which people tend to start buying shares of that company again.

 

Is it good or bad?

Knowing the support level can give you an indication of the lowest 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 buy at that moment or wait until the price goes lower.

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

 

What it means for you

Learning the support level of an asset or of an index can give you insight into what may happen next for the price. Of course, this should not be your only basis, as factors such as company performance and news are also very important to check.

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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