Changes in price are the result of changes in investor expectations of the security's future price. Support levels occur when the consensus is that the price will not move lower. It is the point where buyers outnumber sellers. Resistance levels occur when the consensus is that the price will not move higher. It is the point where sellers outnumber buyers.
Volume is useful in determining how strong the change of expectations really is.
Traders' remorse often follows the penetration of a support or resistance level as prices retreat to the penetrated level. Contact Copyright 2000 Equis International.