Support Line

What is the Support Line?

Author: Manu Lakshmanan
Manu Lakshmanan
Manu Lakshmanan
Management Consulting | Strategy & Operations

Prior to accepting a position as the Director of Operations Strategy at DJO Global, Manu was a management consultant with McKinsey & Company in Houston. He served clients, including presenting directly to C-level executives, in digital, strategy, M&A, and operations projects.

Manu holds a PHD in Biomedical Engineering from Duke University and a BA in Physics from Cornell University.

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Reviewed By: Hassan Saab
Hassan Saab
Hassan Saab
Investment Banking | Corporate Finance

Prior to becoming a Founder for Curiocity, Hassan worked for Houlihan Lokey as an Investment Banking Analyst focusing on sellside and buyside M&A, restructurings, financings and strategic advisory engagements across industry groups.

Hassan holds a BS from the University of Pennsylvania in Economics.

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Last Updated:May 6, 2022

A support line is used in technical analysis to determine a price level through which an asset is unlikely to pass. Using lines of support and resistance allows investors to assess whether an asset is near the top or bottom of its short-term trend. Support lines can be drawn at any price point which the asset has touched several times, but has not passed for a given length of time.

In a long position, a support line shows the lowest price the asset should fall to and in a short position it shows the highest price it should rise to.

A basic trading strategy is to buy at levels of support and sell at levels of resistance.

 

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