Supply and demand levels
Supply and demand are important factors in fundamental analysis of a stock, which is a method of evaluating a company's financial health and future growth potential. Demand refers to the quantity of a stock that investors are willing to buy at various prices, while supply refers to the amount of the stock that is available for sale. If the demand for a stock is higher than its supply, its price will tend to rise, while if the supply exceeds demand, the price will likely fall. In fundamental analysis, supply and demand play a critical role in drawing support and resistance lines . When traders observe the chart of a given security, they can ask themselves whether there is more demand or more supply for that asset. If there is more demand than supply, then prices will increase; if there is more supply than demand, prices will decrease. In order to determine these levels of support and resistance, traders must analyze the relationships between buyers and sellers in the ma