Support, also known as a support level, is the price that an asset does not drop below for an extended period of time. When an asset’s price declines, buyers, enter the market, creating the asset’s support level. Drawing a line around the lowest lows for the time period under consideration allows for the simple support level to be charted in technical analysis. In accordance with the general price movement, the support line may be flat or inclined up or down. The identification of more sophisticated forms of support can be done using additional technical indicators and charting methods.
Support lines are drawn by traders and chartists using prior lows. This strategy can be helpful when attempting to forecast probable price reversal points, which may signal a great time to buy. Diagonals can indicate support levels even though they are typically shown as horizontal, straight lines. However, trend lines are the more common name for diagonals.
