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What is a support level?

 

In technical analysis, a support level is the price level which a security does not fall below for a specific length of time.  The support levels can be identified by drawing either a straight line or slightly angled line across a chart of a security’s price for a specific length of time that connects its lowest price points.

 

Support levels are important as they provide an indication of what price investors will purchase a particular security.  However, it is important to note that support levels are not set in stone; they can and do change over time for a security, depending upon a variety of conditions.