Support and resistance indicators highlight price levels where commodities often stall or reverse, helping traders spot entries, exits, and breakouts.
This is a fundamental technical analysis guide on one of the core indicators in trading. Support and resistance levels.
Read on to find out what support and resistance indicators show, how you can use them to better identify potential entry and exit strategies, and what it means when these lines are ‘broken’.
We use example charts for our technical analysis guides, be sure to use them to get a visual idea of what we’re talking about.
What Are Support And Resistance Indicators?
Support and Resistance is one of the most important and fundamental parts of technical analysis:
- Support: Typically expected that prices should rise after touching support.
- Resistance: Generally expected that prices should fall after hitting resistance.
How To Spot Potential Buy Signals
It is a general expectation that when prices touch a historical level of support, prices will cease the negative momentum downward and reverse course.
Hence a potential buy signal could be triggered when the price touches the support line.
How To Spot Potential Sell Signals
If prices reach a historical price ceiling (resistance), typically it is expected that prices will stop at that level unless some other external impetus like great earnings can send prices past historical resistance.
Therefore, a potential sell signal is triggered when the price touches the historical resistance line.
What Does It Mean To ‘Break Support Or Resistance’?
Another fundamental concept of support and resistance is listed next and is shown in the chart below of Alcoa (AA) stock:
This is where we distinguish between what it means to break support and resistance levels:
- If price breaks below support, then that support level can become the new resistance level.
- If price breaks above support, then that resistance level can become the new support level.
Do Traders Use Support And Resistance Frequently?
Support and Resistance are basic yet vitally important technical analysis tools.
On every time frame, intra-day, daily, weekly, and monthly, traders focus on support and resistance levels.
Knowledge of these levels could help keep a trader on the profitable side of the market.
Where To Start Trading And Practicing
Further Reading on Trend Indicators
These trend tools complement Support & Resistance: Andrew’s Pitchfork, Gann Fans, and Triangular Moving Average.
Technical analysis is most widely used in CFD and forex trading. If you’re ready to apply these techniques, browse our vetted CFD brokers or forex brokers.
Update history
This page was revised 7 times between May 2020 and April 2026.
Added cross-linking to CFD and forex broker resources in Further Reading section.
Removed broker comparison table and charting tool recommendations, replaced Further Reading section with focused trend indicator resources.
Restructured guide with clearer section headings, added introductory overview and table of contents, reorganized broker resources section, and trimmed redundant content about chart pattern videos.
Added call-to-action content alert component after Further Reading section.
Added three new structural headings and reorganized content sections to improve navigation, plus corrected a list item about price breaks above support.
Removed lengthy disclaimer from Potential Buy Signal section.
Reorganized content structure by moving introductory material to opening paragraph and repositioning key educational text within the Potential Buy Signal section for improved flow.
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