Resistance is a key concept in technical analysis that helps traders identify potential price ceilings where an asset may face selling pressure. It represents a level at which the price of a stock or index tends to stop rising and may reverse downward due to increased supply or profit booking by investors.

In simple terms, resistance levels act as barriers that prevent the price from moving higher. These levels are formed when a stock repeatedly fails to break past a certain price point. For example, if a stock touches _500 multiple times but does not move beyond it, _500 becomes its resistance level. Understanding these levels helps traders make informed entry and exit decisions, manage risks, and plan strategies effectively.

Resistance can be identified through various technical indicators such as trendlines, moving averages, Fibonacci retracement levels, and historical price data. When a stock’s price approaches resistance, traders often watch closely to see whether it breaks through or reverses. A successful breakout above resistance may signal continued bullish momentum, while a failure to break through may indicate weakness or consolidation.

It is important to note that resistance is not a fixed number—it can change as market conditions evolve. Once a resistance level is broken, it can often turn into a support level, providing a new price floor for future movements. This dynamic helps traders understand the ongoing balance between buyers and sellers in the market.

Learning to interpret resistance effectively is crucial for anyone using technical analysis. It offers valuable insights into market psychology, price behavior, and potential trading opportunities—making it an essential concept for both beginner and experienced traders aiming to make data-driven investment decisions within SEBI-compliant practices.