What is the support zone?
"Support zone" is a term used to indicate stock options that will start to provide support from the investment community. As a result of this support, the price of shares will start to move upwards as stock trading begins to increase. Support is usually not tied to a specific price, but rather a price zone or a scope in which the support seems to be done. Questions of how high the price can increase and how far it can drop in holding this support help to determine the parameters for the support zone.
Analysis of the support zone of the investment is important in terms of purchasing or selling various stock offers. The aim is to determine exactly how the market will respond to the price of shares at different levels. Assuming that the company issuing the shares is stable and the demand for its products is likely to increase, the investor can be able to buy shares before entering this price into a lower area of support then holds shares, as the price moves up in this zone. As the price starts the ridge near the upper limits Ceno zones, the investor may decide to sell stocks before the price begins to fall, allowing a significant return from the strategy.
There are a number of factors that can affect the support zone. Development of new technologies that threaten to be a product line of the basic company Obsolete or at least less in demand will affect the status that shares among investors have. Concerns about the company management such as resignation and the selection of a new president or the CEO of the company may also slow down the dynamics of the stock price, causing it to drop rapidly. Natural disasters, result or political choice or significant change in the general economy that affects the consumers of Buying's habits could also lead to changes in the support zone.
It is important to realize that shares prices in the support zone can move up and down from time to time. Investors will usually watch movements but nEbudou decide to take any steps if these shifts do not reveal the development of an unfavorable pattern. At this point, there is a great chance that the investor will decide to sell shares rather than continuing to keep them, allowing the chances of loss of already generated revenues, or even prevent the loss of the original investment.