What describes the support level in stock price charts?

• A. A price level where selling pressure becomes overwhelming, causing prices to fall.
• B. The price at which the stock bottoms, where demand exceeds supply and prices begin to rise.
• C. The price level at which the stock reaches a new 52-week high and attracts sellers.
• D. The price level where buying pressure is insufficient to prevent a fall.

Answer: (B)

Support level is the price floor on a stock chart where demand exceeds supply enough to halt a slide and push the price back up. When a stock approaches this level, buyers tend to step in, creating enough buying pressure to stop the fall and reverse upward. This is often identified around previous troughs where the price found a stopping point multiple times, forming a line on the chart that acts as a floor for future declines. If the price breaks below this level, the old support can fail and may even become a new resistance, indicating the chart is now facing selling pressure at that level. The other descriptions mix in selling pressure at a ceiling (resistance), or describe a situation where buying pressure is not enough to prevent a fall (which is the opposite of support), or refer to new highs which attract profit-taking rather than the support dynamic.