Support in Different Cases

C

The concept of support and resistance is important in technical analysis of financial markets. Support refers to a price level at which demand for a security or asset is strong enough to prevent it from falling further, while resistance is a price level at which supply is strong enough to prevent the price from rising further.

Based on the given options, support occurs in the case of option C: "Inability to break below prior low." This is because a prior low is a price level at which demand has been strong enough to prevent the price from falling further in the past. If the price approaches this level again and fails to break below it, this suggests that demand is still strong and that buyers are willing to step in and purchase the security or asset at that price level, creating a support level.

Option A, "Inability to recede prior high," does not necessarily indicate support, as it could also be a sign of resistance. A prior high is a price level at which supply has been strong enough to prevent the price from rising further in the past. If the price approaches this level again and fails to break above it, this suggests that supply is still strong and that sellers are willing to sell the security or asset at that price level, creating a resistance level.

Option B, "Inability to surpass prior low," does not indicate support, as it could also indicate a continuation of a downtrend or a consolidation phase.

Option D, "Capacity to surpass prior high," does not indicate support, as it could indicate a continuation of an uptrend or a breakout above a resistance level.

In summary, support occurs when a security or asset fails to break below a prior low, indicating strong demand and the creation of a price level at which buyers are willing to purchase the asset.