What is resistance (in technical analysis)?
Resistance is a price level where the price has previously stopped and turned on the way up — a ceiling. It exists because many sellers there have previously thought the stock was expensive enough, or wanted out without a loss. If the price breaks up through resistance, it is read as a sign of strength.
The price has turned at the same level three times — that is a ceiling.
Why the ceiling exists
A stock has risen to 200 three times and fallen back each time. Those who bought at 200 last time and sat on a loss sell with relief when they can get out at break-even. Those who profited on the way up take the gain where it turned last time. The selling pushes the price down. Resistance is — like support — memory turning into behaviour.
How it is used
- The price approaches resistance: A place where the rise often pauses. Many wait to buy until they see whether the ceiling holds.
- The price breaks up through it: The ceiling did not hold — there were more buyers than sellers. That is read as strength, and old resistance often becomes new support.
- The price turns at resistance again: The ceiling is confirmed.
What it cannot do
A ceiling of expectations does not stop a good earnings report. When big news comes, the price goes through every ceiling — or every floor. Technical analysis reads the past; it knows nothing about tomorrow's news.
The typical beginner's mistake
Selling because the price "will probably turn at resistance". Sometimes it does. Other times it breaks through and you are on the outside for the best part of the rise. A ceiling is a place to watch — not a signal.
How you see it in Kiggo
Kiggo shows the stock's 52-week range — the year's low and high — as the simplest form of support and resistance. If the price is close to the year's high, that is the most obvious resistance there is. A real chart with drawn lines is on the wish list for Kiggo Plus.
Related terms
Frequently asked questions
What does it mean when a stock "breaks out"?
That the price has gone up through a resistance that held for a long time — often on high volume. Many technical traders buy on breakouts because it shows the buyers have won. It is not a guarantee that the rise continues.
Is the year's high always resistance?
Often, yes. At the year's high nobody is sitting on a loss wanting out — but many have gains they would like to take. That creates selling pressure. If the price breaks through anyway, there is "open air" above until new sellers appear.
Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.
Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.
