Breakout

A breakout occurs when the price of a stock moves decisively above a key resistance level or below a significant support level, often accompanied by higher trading volume, indicating a potential shift in market sentiment. A bullish breakout above resistance suggests that buyers have gained control and may lead to the start or continuation of an uptrend. For a breakout to be considered reliable, the price should ideally sustain above the breakout level or successfully retest it before moving higher. Traders often view strong volume, a decisive close beyond the level, and follow-through buying as signs of a valid breakout, while weak volume or a quick return below the breakout level may indicate a false breakout.