A range breakout and retest happens when price trades between a fixed support and resistance zone for some time, then breaks above the resistance with strong momentum. After the breakout, price often comes back to test the same breakout zone, which now acts as new support — this is called a retest. If a bullish candlestick pattern like a bullish engulfing, hammer, or strong green rejection candle forms near the retest zone, it shows buyers are defending the breakout level and fresh buying interest is entering the market. This combination of breakout, successful retest, and bullish candlestick confirmation is considered a strong bullish continuation setup by traders.