Support

An area on a chart, identified from where declines have previously stopped. It is descriptive: the level is a record of behaviour, not a mechanism that acts on price. Beyond prior lows, several other things are read as support by convention, among them round numbers, the top of an earlier consolidation, a moving average, and calculated pivot levels. Each of those is a different rule producing a different area on the same chart.

The explanations offered for why it holds are about resting interest. Buyers who wanted the market at that price and did not get filled leave orders there; holders who bought earlier add; participants who sold higher take profit by buying back. That is also the reasoning behind the polarity convention, in which an area that previously halted declines is watched as resistance once price has traded decisively beneath it, since the interest that was resting there has been used up or reversed.

Three limits are worth holding together. Support is drawn by eye, so two chartists working from the same window place it differently, and it is properly a band whose width scales with volatility rather than a line. It is identified only after it has already held, so the newest area on a chart is always the least confirmed. And protective orders cluster underneath it, which means a move that does pass through frequently accelerates as it goes, and that acceleration is a consequence of the level being obvious rather than evidence about what the market is worth.