Support

Support price of a security is the price which holds the stock from declining further.

It is assumed that the stock fails to go below the support level. Also, it is said that buyers will come into picture when the price is at its support level and a considerable amount of buy volume is estimated to come in the stock. If the support level breaks, the security may go further down looking at its next support level.

Resistance

Resistance of a stock is nothing but just contrary to support level. It holds the stock from rising further

Sellers may enter in to the stock once it reaches the resistance level. Once if the stock goes beyond the resistance price, it is said that the stock may look for its next resistance.

Support price is generally at lower side of the stock’s current price and resistance at upper side. Once the stock cuts the support level, the same is turned into resistance level with a new support at its lower side.

Let’s try to understand more in a layman’s style. For instance, support and resistance are like two walls for a bird trying to fly high – one at lower side (support) and the other at its upper sider (resistance). As the bird misses its balance, it feels like support level not to get break, the reason being very simple that it may fall more down once if the support breaks. As well, once if it starts flying high, it wants the upper wall (resistance) to get break so that it can fly high. This instance tells us, a trader who takes a long/buy trade does not want the support level to break but only waits for the resistance price to break.