Only EDUCATIONAL Purpose KEY TAKEAWAYS Technical analysts use support and resistance levels to identify price points on a chart where the probabilities favor a pause or reversal of a prevailing trend. Support occurs where a downtrend is expected to pause due to a concentration of demand. Resistance occurs where an uptrend is expected to pause temporarily, due to a concentration of supply. Market psychology plays a major role as traders and investors remember the past and react to changing conditions to anticipate future market movement. Support and resistance areas can be identified on charts using trendlines and moving averages.