Investors loved the Johnson & Johnson (NYSE:JNJ) earnings report. The stock is trading much higher, but it has stalled out around an important resistance level.

In financial markets, some price levels have more importance than others. As you can see on the chart, the $155.00 has been an important one for JNJ. It has been both a resistance and a support level. That's why it is our Stock of the Day.

The stock found support around $155.00 in February before reversing and moving higher. After selling off in March, it found support again around the same level.

Remorseful sellers can cause support to remain intact for an extended period.

There are traders and investors who sold when the shares were at support #1 on the chart. When the price moved higher, many of them decided they made a mistake. They pledged to repurchase their shares if they can buy them back at the same price they were sold.

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So, when the shares returned to $155.00 in March, many of these disappointed sellers placed buy orders. This large concentration of these orders resulted in support forming. This is support #2 on the chart.

After eventually breaking the support in early April, Johnson & Johnson headed lower. But then it reversed and rallied back to $155.00 in May. Then it became a resistance level.

Levels that were support can convert into resistance because of buyer's remorse.

Many of those who purchased their shares at $155.00 decided they made a mistake when the price fell below it. Some of them decide to exit their positions at breakeven if possible.

When the shares rallied back up to this price, these remorseful buyers placed sell orders. There were so many of these sell orders that it created resistance. This is resistance #1 on the chart.

After selling off, the shares have rallied back to $155.00. Once again, they have hit resistance.

Resistance can stay intact for extended periods because of buyer's remorse. Many of the investors and traders who bought at resistance #1 regretted doing so after the price dropped below it.

Now that the price is back up to their level, some are placing sell orders so they can exit their positions at breakeven. This large concentration of supply has formed resistance at the same price that had been resistance before.

Savvy traders know that certain price levels are more important than others. They also know that when a stock reaches one of them, there is a good chance there will be a reversal.

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