GLOSSARY // Technical Analysis
Support
Support is a price area where a falling stock has repeatedly stopped dropping because buyers step in with enough size to absorb the selling. It shows up on a chart as a floor the price bounces off two, three, or more times.
The mechanics are order flow, not magic: prior buyers defend their entries, shorts cover where they covered before, and resting limit orders cluster at round numbers and prior lows. Each successful bounce adds to the level's reputation, which attracts more orders to the same spot.
Support is a zone, not a line to the penny, and it fails outright when selling overwhelms it. A clean break below support on volume often accelerates the decline, and the broken floor frequently acts as a ceiling on the way back up.
Over six weeks a stock bounces at 48.30, 48.05, and 48.20, rallying to 52-53 each time. Buyers are defending the 48 area. On the fourth test it closes at 47.40 on double average volume. The breakdown runs to 44, and the rebound two weeks later stalls at 48.10, the old support now acting as resistance.
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.