Break downward through support

A break downward through support is a sell signal. Especially if volume is also increasing. The buyers who used to be at this level are gone, but there is still sales pressure in the stock.

A stock that recently broke downwards through a support level is expected to continue to fall. Selling or not buying such stocks help the investor avoid the continued fall. If the stock has fallen significantly since the break, a better price can be achieved by waiting for a reaction back.

Please note that stocks in rising trends often trigger false sell signals on breaks downward through support. Investors who own such stocks should normally see a break downward through a long term, strong support level, preferably on high volume, before selling.