A relatively large block of a security that may or will be sold under certain circumstances. For example, a large stockholder may announce a secondary offering of a security. Overhanging supply is of interest to technical analysts who consider a resistance level to be caused by unhappy investors who are determined to sell the security if it reaches a certain price. There is an overhanging supply of the security at the resistance level. Overhanging supply tends to be bearish for a security because investors feel the security will have difficulty rising in price.
