After a huge move lower, shares of BridgeBio Pharma, Inc. (NASDAQ:BBIO) looked like they were beginning to recover. But then the stock crashed into a wall of sellers around the $17 level, which has put an end to the rally.
There’s a reason why there is resistance, or sellers, around $17. In March of 2020, it was a support level. A large number of investors bought BridgeBio back then.
After the stock fell back through this important level, many of the investors who still hold the shares they purchased in March 2020 have a loss. A number of these remorseful buyers decide to sell, but they don’t want to lose money.
As a result, they place their sell orders at the same price they bought their stock at. If there are enough of these remorseful investors trying to sell, it will create resistance at the level. That’s what happened with BridgeBio.
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