Notices

Resistance

From Traderpedia

Definition:
The price level at which sellers are expected to enter the market in sufficient numbers to take control from buyers.


When price makes a new high and then retreats, sellers who missed the previous peak will be inclined to sell when price returns to that level. Afraid of missing out a second time, they may enter the market in numbers sufficient to overwhelm buyers. The resulting correction will reinforce market perceptions that price is unlikely to move higher and establish a resistance level.

Resistance can be formed by accumulation or distribution.

See Technical Analysis