Space Exploration Technologies Corp. (SPCX) shares are trading higher on Monday. Elon Musk said he plans on giving some of his shares to every American child next year. As you can see on the chart, the $146 level has become an important one for SpaceX. This is why it is the Stock of the Day.

SpaceX rallied after it went public in June. But then a large selloff followed. Shares found support around $146, then moved higher.

When this support broke in July, some people who bought shares around $146 decided their purchase was a mistake. Some also decided to hold on to their losing positions, but to sell at breakeven if and when they could.

When the stock returned to $146 in August, they placed sell orders. The large number of these orders created resistance. What had been a support level became a resistance level.

People who sold around this price were glad they did when the price dropped afterward. But some changed their minds when the resistance broke. Some decided to buy their shares back.

But they would only do so if they could get them for the same price they were sold for. When SpaceX dropped back to $146, they placed buy orders. These buy orders created support at the same price that had been resistance.

Successful traders understand that some price levels matter, and some don’t.  Identifying these levels can give traders insight into where to place their buy and sell orders.

These traders don’t guess. They let the market tell them what to do. This is the reason why they profit.

Image: Shutterstock

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.