Support and resistance

Support is a price level where a stock has historically tended to stop falling and bounce; resistance is the mirror — a level where it's tended to stop rising and pull back.

Why these levels exist

They're a story about market psychology and order flow, not a law of physics. If a stock fell to ₹500 before and rallied, some traders remember that and place buy orders near ₹500 again, creating real demand that can (but won't always) slow a future decline at the same level. Resistance works the same way in reverse.

How they're used

Traders often watch for a breakout — a decisive move through resistance — as a bullish signal, or a breakdown through support as bearish. A level that's been tested (approached and held) multiple times is generally treated as more significant than one tested only once.

The honest caveat

Support and resistance are drawn from historical price action and are somewhat subjective — different people can reasonably mark slightly different levels on the same chart. They're a useful, widely-shared mental model, not a precise, universally-agreed-upon number. Once a support level is broken, it often becomes the new resistance on any later rally back toward it, and vice versa.