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The price level at which a rising price is expected to stall when market participants begin to sell the instrument. The opposite of resistance is support.
In technical analysis, resistance is a price level at which a stock or market tends to stop rising and may start to fall. It's the point where the selling interest overcomes buying pressure. Resistance levels can indicate a price ceiling or a barrier to further price increases.
Understanding resistance levels is important for traders as it helps in making informed decisions about entry and exit points. If a stock price approaches a resistance level, it may indicate a potential sell signal or a pause in buying. Traders use resistance levels to set target prices and stop-loss orders, helping to manage risk and capitalise on market movements.