Glossary · Defined term
Support level
A support level is a price where buying pressure has repeatedly stopped declines, acting as a floor until broken.
Last updated Oct 2, 2026
What it means
A support level is a price at which a stock has repeatedly stopped falling and bounced, as if hitting a floor. It forms because buyers emerge at that price: value investors see a bargain, short sellers buy back to lock in profits, and traders who missed the last bounce place orders there. Each successful defense reinforces the level.
Support is most convincing when tested multiple times on meaningful volume. Prior lows, round numbers, and rising moving averages all commonly act as support. When a support level finally breaks, it often flips roles and becomes resistance, as the buyers who defended it turn into sellers trying to exit at breakeven.
Traders use support to manage risk. Stop-loss orders are frequently placed just below support, which is logical but crowded: if the level breaks, a wave of triggered stops can accelerate the decline. That is why experienced traders look for support to hold on a closing basis rather than trusting every intraday dip.
An example
For illustration, a stock bounces off its rising 50-day moving average four times in three months. That average is acting as support; a decisive close below it would signal the uptrend may be failing.
Related terms
Resistance level, Moving average, Candlestick chart, Stop-loss order