Resistance Level
A resistance level is a price zone where a rising stock has tended to stall or reverse because selling pressure has been strong enough to halt the advance.
Resistance is the opposite of support. It appears on a chart as a ceiling where prices have repeatedly turned lower. Sellers may include investors taking profits or holders who bought near that price earlier and want to get out at breakeven.
Typical sources are previous highs, round numbers, falling trend lines and widely watched moving averages. An all-time high has no resistance above it from earlier trading, which some traders view as significant.
When the price closes clearly above resistance, especially on high volume, traders call it a breakout. The old resistance level often becomes new support afterward, a pattern known as role reversal. False breakouts, where price briefly pops above and then falls back, are common.
Example: a stock has topped out near $80 four times in a year, each time falling back to the low $70s. Traders would label $80 as resistance and watch whether a future move can close and hold above it. As with support, resistance is a zone rather than an exact number.