A channel breakout occurs when price decisively moves above the upper boundary of a price channel (in an uptrend or sideways market) or below the lower boundary (in a downtrend), signaling a potential shift in momentum and the start of a stronger directional move. It indicates that buyers or sellers have gained control beyond the previously respected range, often supported by higher volume and strong closing prices outside the channel. A sustainable channel breakout suggests trend continuation or acceleration, while traders typically watch for retests of the broken channel line to confirm validity and manage risk, as false breakouts can occur if price quickly re-enters the channel.