1. *Definition*: A price level or area where the stock historically tends to bounce back or reverse its downward trend.
2. *Key Characteristics*: Acts as a floor, preventing the price from falling further.
3. *Importance*: Buyers tend to enter the market at support levels, anticipating a reversal.

*Resistance*

1. *Definition*: A price level or area where the stock historically struggles to break through, often reversing its upward trend.
2. *Key Characteristics*: Acts as a ceiling, limiting further price increases.
3. *Importance*: Sellers tend to enter the market at resistance levels, anticipating a reversal.

*Identifying Support and Resistance*

1. *Historical Price Action*: Analyze past price movements to identify repeated bounces or reversals.
2. *Trend Lines*: Draw lines connecting multiple highs or lows to visualize support and resistance.
3. *Chart Patterns*: Recognize patterns like double tops, double bottoms, and triangles.

*Trading Strategies*

1. *Buy at Support*: Enter long positions when the price bounces off support.
2. *Sell at Resistance*: Enter short positions when the price hits resistance.
3. *Stop-Loss Placement*: Set stops below support or above resistance to manage risk.

*Key Considerations*

1. *Dynamic Nature*: Support and resistance levels can shift over time.
2. *Market Sentiment*: Changes in sentiment can alter support and resistance.
3. *Combination with Other Indicators*: Use support and resistance in conjunction with other technical and fundamental analysis tools.
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