“Support” and “resistance” is slang popular with business professionals on Wall Street.

“Support” applies generally to a stock that is directed downward in the short term, but may be a long-term uptrend or downtrend. It refers to the price level at which the stock seems to bounce back up over time. You may consider support as a floor that the stock did not seem to break for a long time.

Staying with the above example, “resistance” is like a ceiling. It ‘s the price level at which the stock seems to bounce back down once it is reached.

The good news is that once a stock finally penetrates through the resistance, you can go to the moon. Traders love a stock that breaks through the ceiling because there is nothing holding it from going higher.

Similarly, once a stock falls through the floor, it is likely to go down and down until it finds a new support. This could be a support level at which the stock previously had stayed several times in the past.

Stocks that face resistance or support usually don’t break the level easily. Trading professionals generally like to buy stocks that are in a long-term uptrend and are just bouncing up from support. Or better yet, they like to buy a stock when it breaks through its resistance.