Series 3: 6.2.2.1. Support And Resistance

6.2.2.1. Support and Resistance

The peaks are called a resistance level. This is the price that technical traders believe a commodity will have difficulty pushing past. When the price hits a resistance level, it acts as a ceiling price that succeeding prices will “bounce” off. At this price, traders will begin to sell off their holdings, and prices will fall. Conversely, when the commodity’s price is falling, it is likely to hit a support level, or floor price. A decline is halted at the support lev