Support

A term used to describe price conditions such that prices cannot drop any lower, indicating a ‘floor’ that cancels out trader expectations.

Support is a term used in corporate finance to describe situations where the price of an asset is unable to fall beyond a particular point. This point is described as a floor for the asset price and it generally comes about on account of strong buying pressure. As a result, price support can only be surmounted when there is stronger selling pressure.

Support is the reverse price condition of resistance. In the latter, prices are unable to rise beyond a certain point, a point referred to as the ceiling. Thus, both of these price indicators or conditions give traders an idea of what to expect from the market.