Glossary
Support
A price level where a falling stock has repeatedly stopped and turned up, because buying has tended to outweigh selling there.
On this page
Support is a price area where a declining stock has tended to stop falling and bounce, because demand there has been strong enough to absorb the selling. On a chart it shows up as a floor touched two or more times. Traders watch support because it offers a reference point: a place to judge whether a pullback is healthy, where to put a stop, or where a breakdown would change the picture.
Why it forms
Support is about memory and money. Buyers who missed an earlier low may place orders near that price the next time. Holders who bought there want to defend their entry. Round numbers, prior highs that were broken, and widely watched moving averages such as the 200-day line also attract orders. None of this is a law of physics; it is a pattern in how people place orders.
What to watch for
Treat support as a zone, not a precise line; wicks often poke a little below it before price recovers. The more times a level is tested, the more stop orders tend to cluster just under it, which can make the eventual break sharper. Volume helps judge a break: a decline through support on light volume is less convincing than one on heavy volume. Support on a weekly chart usually carries more weight than one visible only on a five-minute chart.