In finance, psychological level, is a price level in technical analysis that significantly affects the price of an underlying security, commodity or a derivative. Typically, the number is something that is "easy to remember," such as a rounded-off number. When a specific security, commodity, or derivative reaches such a price, financial market participants (traders, market makers, brokers, investors, etc.) tend to act on their positions (buy, sell or hold).
Examples:
1. Dow Jones Industrial Average Index - $14,000.00 - the all-time high psychological thousandth level as of 11/9/2007. Also known as "Dow 14,000"
2. Crude Oil (light, sweet) - $100.00/barrel
Famous quotes containing the word level:
“To Time it never seems that he is brave
To set himself against the peaks of snow
To lay them level with the running wave,
Nor is he overjoyed when they lie low,
But only grave, contemplative and grave.”
—Robert Frost (1874–1963)