Term:RESISTANCE

A price level at which rising prices have stopped rising and either moved sideways or reversed direction; usually seen as a price chart pattern. Resistance levels are normally caused by one or more large sellers giving their brokers massive sell orders at a certain price. Then the share (or other instrument) will rise to that level and get beaten back by a flood of sell orders. It may rise to that resistance several times before the sell orders are all completed and the share can break above the resistance.

resistance line

Resistance line

For a good example, refer to the PDSnet article, Resistance, by clicking here.

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