Stock Market Glossary
Resistance
Resistance in technical analysis explained: how it forms, what a breakout can mean and how to avoid false precision.
In brief: A resistance level is a price area where rising prices have repeatedly met selling interest in the past. It is a zone watched by market participants, not an exact price point.
How it works
Resistance can form around previous highs, round numbers, moving averages or areas with high trading volume. A breakout is often considered more meaningful when volume rises and price subsequently holds above the area.
Practical example
If a share repeatedly fails near EUR 100, that area may act as resistance. If it later closes clearly above it and confirms the zone as support on a pullback, the technical picture has changed. It is not a guarantee of further gains.
What investors should keep in mind
Resistance is a probability zone, not a law of nature. Combine it with risk management, liquidity, time horizon and fundamental information instead of basing a decision on a chart line alone.
