Price below resistance

The price is below a resistance level, where the stock has previously turned downwards. Many investors may consider it expensive if it rises up to resistance, and may then wish to sell.

Price below resistanceResistance is a level where many sellers are thought to become active. It is normally assumed that the stock will not rise above the resistance level. Resistance is thus often used to calculate the upside potential of a stock, especially for short term investors. A stock with a long way up to resistance has a bigger upside potential than a stock near resistance.

Especially in falling and horizontal trends, resistance expresses the upside potential in the stock. If, at the same time, there is little to no support below the current price, the downside potential tends to be big.

 


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Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.

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