Support and Resistance in Stock Prices
Prices stay between floor and ceiling, until something breaks through.
© Michael Blann—The Image Bank/Getty Images
Stocks, ETFs, commodities, and really all market prices fluctuate, whether they’re on their way up or down. If an asset price is trending up, it occasionally pulls back. If its trend is down, it occasionally rallies. This can work in your favor if you’re looking to enter the market or add to your positions. Yet reversals can also be worrisome when prices move against your preferred direction.
But there’s a way to try to anticipate these pullbacks or to chart areas where they might occur. If you take a closer look at prices over time, you’ll notice that there are certain price levels that tend to elicit a bounce and…
