Support level
A price where a stock has tended to stop falling, often because buyers stepped in there before. Moving averages are often treated as support.
In plain English
Traders draw support on a chart where the price bounced before, or use a moving average as a floor. The theory: the next time the price comes down to that level, buyers will show up again.
Uncle Gary explains
Support is Aunt Linda's patience. It gets tested many times. It holds, it holds, it holds. Then one day Kevin mentions crypto at dinner and it breaks for good.
Why it matters for your money
Many traders buy near support and put their stop just below it. In our test, buying near a moving average acting as support didn't beat buying a strong stock without the dip.
Where we tested it
- Does Buying the Dip Work? We Checked Which Dips
- Do Support Levels and Fibonacci Work? We Drew Random Lines Too
Related terms
All glossary terms. Educational content, not financial advice.