Resistance happens to every stock and trading pair at some point. Most of the time, significant resistance occurs at the upper levels of the market range of the underlying instrument; however, resistance will be present all through the span of the pricing with historical resistance points being formed over time.
The amount of time that an underlying instrument, be it a share of a company or a currency, is in the field of resistance will be totally dependent upon a number of factors, with the most critical factors being the momentum of the underlying instrument, the volumes being traded at that time which both in turn dictate the demand for the underlying instrument..
Knowing the resistance level is essential as most underlying instruments are not likely to increase in value much after hitting this level if the sentiment is starting to turn and may start to depreciate.
What is a resistance line?
If you are not sure what is a resistance line is, it’s a line created by market analysis. Resistance lines are plotted, and ...