What Is Support and Resistance?
Support is a price level where buying has repeatedly stepped in to stop a fall. Resistance is a price level where selling has repeatedly capped a rise. Think of these as floors and ceilings the market "remembers."
Why Does the Market Remember?
Because real people — millions of traders and investors — made decisions at those prices. Someone who bought NIFTY at 22,000 and watched it fall wants to "get out even" if it comes back to 22,000, creating selling pressure there. Someone who missed buying a dip wants to buy if price returns to it. This collective memory is why the same levels get tested again and again.
Types of Support/Resistance
- Prior swing highs/lows — the most recent turning points on the chart.
- Round numbers — NIFTY 25,000, BANKNIFTY 55,000. Psychological levels attract orders simply because they are easy numbers to remember.
- Moving averages — the 50-day or 200-day average often acts as dynamic support/resistance.
- Gap levels — price gaps from earnings or news often get "filled" or act as barriers.