Breakout Failure – Newgen Software explanation in details

In this chart, the rising trendline breakout appears to have failed after the price moved below the trendline with strong selling pressure. The stock had been respecting the rising trendline for several months, indicating that it was acting as dynamic support. Once the price broke below it, the subsequent sharp fall from the ₹1,650–₹1,750 area toward ₹1,200 confirmed significant weakness. The failure to sustain above the trendline suggests that the earlier bullish structure was lost and sellers gained control. After the breakdown, the stock entered a weaker phase and moved toward the ₹900–₹1,000 zone. This is a good example of why a trendline breakout should be confirmed by price sustainability, volume and follow-through, rather than assuming the first breakout is genuine.