If you observe a stock chart closely, you'll find that there are certain price levels at which the graph seems to have got stuck and it has remained consistently at these price levels for a pretty long time, unable to move up or down. These points are significant for the overall analysis of the stock chart because these indicate the ability of the stocks of a company to overcome situations of crisis. The level of resistance is defined as the price level the stock is unable to break through or has done so with much difficulty. Similarly, the level of support is the price level below which the stock price seldom falls. If you observe that the stock price has overcome the level of resistance in more instances than one, then this shows that the stocks of the company have the potential to recover from crisis and it is relatively safer to invest in stocks of the company.