Price above support

The price is above a support level, where the stock has previously turned upwards. Many investors may consider it cheap if it falls towards support again, and may then wish to buy.

Price above supportSupport is where many buyers are thought to become active. It is normally assumed that the stock will not fall below support. Support is thus often used to calculate the downside potential in the stock, especially for short term investors. A stock with a long way down to support has a bigger downside than a stock near support.

Especially in rising and horizontal trends, support expresses the downside potential in the stock. If, at the same time, there is little to no resistance above the current price, the upside potential tends to be high.

 


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Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.

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