Support level refers to the price level within which a security stays or does not fall below for a specific period of time. The support level is created by buyers entering the market whenever the security’s price dips to a lower price. It is used frequently in technical analysis and an indicative support level can be created by drawing a line along the lowest lows for the time period under consideration.
HIghlights of Support Levels
Some highlights of Support levels are: a) Support level is the level at which demand becomes very strong and stops the stock from falling any further.
b) If the price goes below the support level by high volumes, it is called a breakdown.
c) It is the level at which traders plan their strategy to enter a stock.
d) Support level is the opposite of resistance level which is the maximum price where the sellers exit.
