Trading in The Estée Lauder Companies Inc. (NYSE:EL) is quiet on Tuesday. But the shares may be setting up for a move higher. As you can see on the chart below, they found support once again around the important $85 level. This is why Estée Lauder is the Stock of the Day.

One of the things successful traders understand is how to identify important price levels for a stock. These are called support and resistance levels.

At support levels, there is high demand, with many buy orders for a stock. Selloffs will end or pause if they reach support levels.

The opposite is true with resistance levels. There are large amounts of supply or sell orders at them.

An important dynamic for traders to understand is how a price level can shift back and forth between support and resistance.

In October 2024, $85 was a support level. When this support broke, many of the traders and investors who bought shares around $85 regretted doing so.

Some decided to hold on to their losing positions, but they also decided that, if they could ever do so, they would sell at break-even. So when the stock rallied back to $85 in January 2025, they placed sell orders.

The large quantity of these orders created resistance at the level that had previously been support.

In June 2025, this resistance was broken, and the stock moved higher. When this happened, some of the people who sold at the resistance decided that doing so was a mistake. They also decided that if they eventually could, they would buy their shares back at their selling price.

As a result, when the price fell back to $85, they placed buy orders. These buy orders have formed support.

One way traders profit is by identifying important price levels in the markets. They know that when stocks reach these levels, trends change and profits can follow.

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