Question:

What causes a stock to brake support?

by  |  earlier

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why does a stock go up to a certain point then back down for example wmt has been close to 60 but never went over why does it do this?

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  1. When a stock price goes up to a level then goes back down, it has met a resistance level.

    When a stock price goes down to a level then goes back up, it has met a support level.

    If the stock price goes down to a support level and breaks down through it, this is just due to more sellers than buyers. There was not enough support for the stock at that price.

    For your example of the WMT price not going above $60, there were not enough buyers willing to pay more than $60 for a share. There were more sellers than buyers. Thus the resistance to a higher price.

    Stock technical traders look at various price levels to find which ones have shown previous support and resistance. Buys and Sells are made just above and below these levels.


  2. Even if I assume that you meant to say "break" instead of "brake", your question still doesn't really make sense. Can you rephrase it?

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