what is a range 
range refers to the difference between the low and high prices for a security or index over a specific time it defines the difference between the highest and lowest prices traded for a defined period such as a day a month or a year the range is marked on charts for a single trading period as the high and low points on a candlestick or bar technical analysts closely follow ranges because they re useful in pinpointing entry and exit points for trades investors and traders may also refer to a range of several trading periods as a price range or trading range securities that trade within a definable range may be influenced by many market participants attempting to exercise range bound trading strategies understanding a trading rangea range for an individual trading period is the highest and lowest prices traded within that time the trading range for multiple periods is measured by the highest and lowest prices over a predetermined time frame the relative difference between the high and the low defines the historical volatility of the prices whether on an individual candlestick or over many of them the range depends on the type of security it depends on the sector in which it operates for a stock the range for fixed income instruments is much tighter than that for commodities and equities that are more volatile in price a treasury bond or government security typically has a smaller trading range than a junk bond or convertible security even for fixed income instruments the amount of volatility can vary from one asset to another and from one security to another investors prefer lower volatility so prices becoming significantly more volatile are said to indicate turmoil of some kind in the market many factors affect a security s price and hence its range macroeconomic factors such as the economic cycle and interest rates have a significant bearing on the price of securities over lengthy periods a recession can dramatically widen the price range for most equities as they plunge in price examples of trading rangesmost technology stocks had wide price ranges between 1998 to 2002 as they soared to lofty levels in the first half of that period then slumped in the aftermath of the dotcom bust many to single digit prices 1similarly the 2007 08 financial crisis considerably widened the trading range for equities due to the broad correction that saw most indices plunge more than 50 in price stock ranges have narrowed significantly since the great recession as volatility has reduced during a multi year bull market ranges and volatilityprice volatility is equivalent to risk so a security s trading range is a good indicator of risk a conservative investor prefers securities with smaller price fluctuations compared to securities that are susceptible to significant gyrations such an investor may prefer to invest in more stable sectors like utilities healthcare and telecommunications rather than in more cyclical or high beta sectors like financials technology and commodities high beta sectors may generally have wider ranges than low beta sectors range support and resistancea security s trading range can effectively highlight support and resistance levels the 10 region would be considered an area of strong support if the bottom of a stock s range has been around 10 on several occasions spanning many months or years traders interpret it as a bearish signal if the stock breaks below that level especially on heavy volume conversely a breakout above a price that has marked the top of the range on numerous occasions is considered as a breach of resistance and provides a bullish signal 