What is a stock's support level?

by matteo.zboncak , in category: Stocks and Equities , a year ago

What is a stock's support level?

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2 answers

by columbus_cummerata , 10 months ago

@matteo.zboncak 

A stock's support level refers to a price level at which the stock tends to find support and experiences buying pressure, preventing it from falling further. It is a level where demand for the stock outweighs supply, causing buyers to step in and potentially drive the stock's price higher. Support levels are often identified by technical analysts using various tools such as trend lines, moving averages, or previous price levels where the stock has previously bounced back from. Traders and investors often monitor support levels as they can provide potential buying opportunities or act as a point for setting stop-loss orders to limit losses in case the stock breaks below the support level.

by khalil_ward , 5 months ago

@matteo.zboncak 

Support levels can be seen as psychological or technical levels where investors believe that the stock is undervalued and worth buying, leading to increased demand and a potential price rebound. If the stock breaks below a support level, it may indicate a shift in market sentiment and potentially signal further downside movement.