Resistance level is a form of technical analysis associated with investing and highlights a price that a share price has struggled to go beyond. Once identified, it is usually interpreted as a sign that a share price will fall in the near future.
Therefore, resistance levels can strongly influence selling decisions for shares as an investor may wish to ‘cash out’ at the resistance level to avoid a potential short-term decline or an increasingly strengthening resistance level.
Resistance levels are the opposite of a support levels.
Support levels are the opposite to resistance levels and highlight a price that a share tends not to fall below.
Support levels are a form of technical analysis and can be interpreted as a sign to buy into a share as investors believe the share price will rise because it has reached its proven low point.
These are the opposite to resistance levels.