What do support and resistance refer to on a chart?
This refers to finding areas where the price frequently stopped or reversed. Floors and ceilings are not guaranteed.
Table of contents
Remember this first
First, 3 things to remember
- 1Support is the range where a falling price stopped or rebounded.
- 2Resistance is a range where an upward-moving price is blocked or has previously declined.
- 3Look at the surrounding price range together rather than just a single line.
Look for price levels where the price has stalled multiple times.
If the price has rebounded multiple times when approaching 10 dollars, that area can be called support. Conversely, if it has fallen multiple times near 11 dollars, it can be viewed as resistance.
Names describe past reactions. They are not a promise that it “will never fall below 10 dollars.”
It does not have to align perfectly with a single point.
If there were similar reactions at 10 dollars, 10.1 dollars, and 10.2 dollars, try marking it as a 10~10.2 dollar range. The lines in the chart do not prevent future price movements.
In the chart exercise below, only past candles are shown first. Find points where the price reversed at similar levels, then reveal the next results.
- 1
Decide whether to look at 1-minute charts or daily charts.
- 2
Mark areas where the price has turned around multiple times at similar price levels.
- 3
Observe whether the subsequent price stays within that range or breaks out.
If the price falls below the support level, re-evaluate.
When the price falls below a level you considered support, it is called a breakdown. Observe whether it briefly dips and returns or stays below.
Conversely, moving above resistance is called a breakout. You must also check if it stays above or quickly returns. Labeling it does not determine the next direction.
Try writing it down like this at first.
Write down the facts you observed, such as "It stopped twice near 10~10.2 dollars on the 1-minute chart." Recording the time and price you looked at makes it easier to compare later.
After seeing the results, do not keep moving the lines to make it look like you were right all along. Keep both the initial reason for drawing it and how it changed afterward.
Before viewing the results, take a look yourself.
Price at the observation point
Educational virtual example · Not actual stocks/quotes.
View chart data as a table
| Bar | Starting price | High price | Lowest price | Last price |
|---|---|---|---|---|
| 1 | 10.60 | 10.80 | 10.30 | 10.40 |
| 2 | 10.40 | 10.50 | 10.02 | 10.15 |
| 3 | 10.15 | 10.60 | 10.08 | 10.50 |
| 4 | 10.50 | 10.92 | 10.40 | 10.75 |
| 5 | 10.75 | 10.88 | 10.35 | 10.45 |
| 6 | 10.45 | 10.50 | 10.06 | 10.20 |
| 7 | 10.20 | 10.65 | 10.10 | 10.55 |
| 8 | 10.55 | 10.95 | 10.50 | 10.80 |
The subsequent results are hidden. Look for recurring reactions at similar price levels so far.
You should not make such assumptions
“If it has reacted many times, it surely won't break, right?”
Even if it has stopped multiple times, it could fall below that level next time. Past reactions do not guarantee the future.
Check what you have read.
- Did you mark the range before looking at the subsequent prices?
- Can you explain why you chose that price?
- Have you also seen cases where it moved out of that range?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 2
- Support and resistanceNew window
Fidelity Trading Strategy Desk · Verify 2026-10-20
Concepts of support and resistance · Interpretations may change after breaking out of a range - Getting Started with Technical AnalysisNew window
Fidelity Investments · Verify 2026-10-20
Observing trends through highs and lows · How to interpret historical prices and limitations of forecasting
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.