Resistance is a price level (often an area, not an EXACT price) that traders tend to sell at. This often prevents price from going above this level, thus creating a "ceiling" above which the price has difficulty moving.
Note that resistance can be defined by a horizontal or slanted line. The more times price tests and fails to break through (or close beyond) resistance, the stronger the resistance level is considered to be.
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- 03-16-2010 12:36 AM