Support Line

Technical analysis term; lower limit for price losses.

In technical analysis, support and resistance are of importance for price forecasts. When it comes to losses, the support line is a price level that was hit in the past already but not broken. The reason for this are mainly psychological factors, since, at this point, greater profit taking occurs while demand declines due to the high price level. Therefore, the breakthrough through a resistance line counts as a strong buy signal.

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