📚 Stock Market Glossary
Clear, beginner-friendly explanations, real-world analogies, and visual formulas for key stock market terminology.
Support & Resistance
Trading & Market💡 Key Takeaway: Price levels on a chart where buying interest (support) or selling pressure (resistance) halts price movement.
Building Floor & Ceiling Analogy: Bouncing a ball off the floor (support) and ceiling (resistance). Breaking through the ceiling turns it into the floor of the next level!
😎 10-Second Show-off Pro Tip for Friends!
😎 Show-off Tip: Say, 'Wait for a clear breakout and retest of resistance-turned-support! That Role Reversal provides the safest risk-to-reward entry.'
📖 Beginner-Friendly Explanation
STEP 1
Core Concept & Meaning
Support and resistance levels form foundational price boundaries on technical charts.
STEP 2
Why It Matters & Mechanism
- Support Line: A price floor where concentrated buying power stops prices from falling further. Previous lows, major moving averages, and round numbers often act as support.
- Resistance Line: A price ceiling where heavy selling pressure stalls price rallies. Previous highs and heavy volume zones serve as resistance.
STEP 3
Practical Investment Tips & Pitfalls
A vital technical rule is Role Reversal: once a resistance line is broken with heavy volume, it becomes a new support floor.
📊 Support/Resistance Line Core Mechanism
Strong trading volume + Breakthrough of resistance line ➔ Resistance line changes role to ‘new support line’ (transition to bottom)
▶ Breaking out of the support line ➔ Accelerating selling and the support line turning into a ‘new resistance line’
▶ Round figure (100,000 won, $500, etc.) is strong psychological support/resistance
⚖️ Key Comparison at a Glance
| Category | Support | Resistance | Role Reversal |
|---|---|---|---|
| Stock price position | Bottom formed below the current stock price | A ceiling formed above the current stock price | Breaks through the resistance line and forms a new support line |
| Buy/sell sentiment | Inflow of low-price buying forces (prevention of stock price decline) | Profit taking and withdrawal of bids (blocking the rise) | After breaking through, the existing resistance zone acts as a solid support |
| Trading response | Split buy near support line | Consider taking profit/selling near resistance level | Repurchase entry when support is confirmed after breakthrough |
📌 Practical Market & Real-World Example
After rejecting resistance at 70,000 KRW three times, a high-volume breakout transformed 70,000 KRW into a rock-solid support level.