A resistance level is a price point where selling pressure historically emerges, preventing further upward price movement. These levels form when an asset repeatedly fails to break above certain prices due to increased selling activity from profit-taking, short selling, or supply imbalances. Resistance levels are key components of technical analysis.

Resistance levels can be horizontal (specific price points), diagonal (trend lines), or dynamic (moving averages). When resistance is broken with strong volume, it often becomes support for future price movements. Understanding resistance helps traders identify potential reversal points, entry/exit levels, and breakout opportunities.

Real-world example: Apple stock repeatedly fails to break above $180 over several months, establishing this price as a resistance level where selling pressure emerges, until a strong earnings report finally breaks resistance with high volume, leading to further gains.