DEFINITION of 'Test'

In technical analysis, it is when a stock price approaches a support or resistance level set by the market. If the stock stays within the support and resistance levels, the test is passed. However, if the stock price reaches new lows and/or new highs, the test has failed.

BREAKING DOWN 'Test'

To test whether a stock price will break a support or resistance level, technical traders will typically use specific stock-charting programs designed to track price movements to identify when to buy or sell a position.

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