A breakout and retest is a common price action concept where a stock first breaks above a key resistance level (or below a support level) with strong momentum, indicating a potential new trend, and then comes back to test that same level again before continuing in the breakout direction. When price breaks resistance and later retests it from above, that old resistance often acts as new support, confirming the strength of buyers; similarly, after a breakdown below support, the price may retest it from below and face rejection, confirming seller dominance. This retest helps traders avoid false breakouts and provides a better risk-reward entry with stop loss placed near the retested level.