This is a level where a stock has a difficult time moving through. Resistance levels can be caused by former tops, breakout prices, moving averages, or just price levels where a stock has spent a lot of time in the past. When choosing buy levels, we watch for a stock to break through resistance on good volume. That indicates the move through the resistance is strong, and that the stock will most likely stay above that resistance. In such situations, former resistance then becomes support. When we take a position coming off of support, we always look for resistance levels as points where we may encounter resistance so we do not lose gains we have banked if resistance proves too much.