Support: price level where buyers step in. Resistance: where sellers step in. Formation drivers: 1) memory/anchoring (past prices become reference), 2) pain/regret (missed opportunities create behavior), 3) supply-demand balance. Key concept: role reversal—broken resistance can become support, and vice versa (e.g., SMCI: $36 resistance → support). Trading applications: buy near support (stop-loss below), sell near resistance, set break confirmation points, execute stops on clear breaks.
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