Resistance is a large group or concentration of investors who are all trying to sell at the same price. At resistance levels, there is more supply than there is demand. This is why stock rallies end when they reach them.
When a stock has a breakout, like Ford may have, it shows an important dynamic. The sellers who created the resistance have left the market.
They have finished or canceled their orders. Either way, the large supply that formed the resistance is gone.
This means that buyers will need to bid higher prices to entice sellers. This could force the stock into rally mode and result in higher prices.
By Mark Putrino
© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.