7.9What is resistance?
1What is it?
Resistance is a price level where rising prices tend to stall, because sellers appear.
2Why does it exist?
Holders who bought earlier sell to break even or book profit there.
3Real-life example
A ceiling: the ball hits it and comes back down.
4Diagram
5Quick revision
- Ceiling where sellers appear.
- Old resistance can become new support after a breakout.
6Knowledge check
Q1. What happens at resistance?Show answer
Selling halts the rise.
Q2. What can happen to resistance after a breakout?Show answer
It can become support.
Q3. Support vs resistance in one line?Show answer
Support is the floor, resistance is the ceiling.