Support and resistance are key technical concepts that underpin much of the price–based analysis used by stock and futures traders. Support is a price level that acts as a "floor," preventing prices from dropping below that level. Resistance is the opposite: a price level that acts as a "ceiling," a barrier that prevents prices from rising higher.

Support and resistance levels are a natural outgrowth of the interaction of supply and demand in any market. For example, increased demand for a stock will cause its price to rise, creating an uptrend. But when price has risen to a certain level, traders and investors will take profits and short sellers will come into the market, creating "resistance" to further price increases.

Price may retreat from and advance to this resistance level many times, sometimes eventually breaking through it and continuing the previous trend, other times reversing completely.