Support and resistance levels are important concepts in technical analysis, used to identify potential price points where a stock or other security may encounter buying or selling pressure. These levels are based on the idea that the market tends to move within a certain range, with buyers stepping in at the support level and sellers at the resistance level. Traders often rely on support and resistance levels to determine entry and exit points for trades, as well as to set stop-loss orders to limit their losses. However, it is important to remember that support and resistance levels are not always exact, and market volatility can cause prices to move beyond these levels. Therefore, traders should use support and resistance levels in combination with other analysis techniques to make informed trading decisions.

Support and resistance are fundamental tools in technical analysis, providing critical reference points for price action. Support represents a price level where buying interest is strong enough to prevent further decline, while resistance is a level where selling pressure halts upward movement. Traders rely on these levels to make informed entry, exit, and stop-loss placement decisions.

Identifying these zones helps gauge market sentiment, trend direction, and potential reversals. However, blind reliance can be risky as support and resistance levels are not absolute; they can be broken, leading to false signals. Combining these levels with other indicators like volume, moving averages, or Fibonacci retracements enhances reliability. Ultimately, support and resistance form a cornerstone of disciplined and strategic trading.