Support / Resistance Basics

Support , Resistance and pivot points are three words which are used in mkt frequently. Pivot is calculated by adding high ,low and close price of previous day and divided by 3.So you may say pivot is an average price of previous day trade and if price opens above the pivot point and mkt is bullish you may opt for long trades . But how long …where to exit ??? You may place your exit order or profit target based on resistance levels..
A support level is a price level at which sufficient demand for any stock appears to stop or hold downtrend temporarily at least and chance of possible reverse from this level. And a resistance zone be the same is a price level at which sufficient supply of any stock is available and stock may turn back from that point.
Price movement either up/down is a result of a head-to-head battle between a bull (the buyer) and a bear (the seller). Bulls push prices high, and bears lower them. The direction prices actually move shows who wins the battle.
Support is a level at which bulls (i.e., buyers) take control over the prices and prevent them from falling lower. 
Resistance, on the other hand, is the point at which sellers (bears) take control of prices and prevent them from rising higher. The price at which a trade takes place is the price at which a bull and bear agree to do business. It represents the consensus of their expectations.

Support levels indicate the price where the most of investors believe that prices will move higher. Resistance levels indicate the price at which the most of investors feel prices will move lower.
One of the most-common and best-known trading strategies is this: "Buy at the support level and sell at the resistance level." The significance of the support level can be understood this way: Imagine that on a given day, for some particular reason (or by sheer chance) a stock is traded very heavily at a certain price level. Also imagine that many traders remember this price level because they bought or sold the stock at this level. Next, suppose that the stock price first moves up away from this level and, later on, (for some reason or no reason) the stock price trades back again to the earlier level. Traders who previously bought the stock and sold it for a profit would likely buy it again at this level. Those who previously sold the stock at this level and missed the recent run-up would have a chance to buy it back. Such buying activities usually slow down the drop and may reverse the momentum. At least, the stock price may take a rest at this level before moving in a new direction. We can then say that the stock price has hit some "support level," by which we suppose that it most likely will not quickly drop through it. The sensible trading strategy is, of course, to buy the stock near this support level, monitor it closely, and sell it to cut losses if it falls meaningfully lower than the support level. If the support level does prevent the stock price from falling and it starts to bounce back, the trader can make a nice profit that is usually much larger  than the amount of loss incurred if the trade turned south and loss had to be limited  by placing a stop loss order .

Resistance becomes support

When a resistance level is successfully broken through, that level becomes a support level. Similarly, when a support level is successfully broken through, that level becomes a resistance level.
The reason for it is that a new "generation" of bulls appears, who refused or missed the opportunity to buy when prices were low. Now they are anxious to buy at any time the prices return to the previous level. Similarly, when prices drop below a support level, that level often becomes a resistance level that prices have a difficult time breaking through. When prices approach the previous support level (now acting as resistance ), investors seek to limit their losses by selling their holdings and thus the role changing remains intact .