A failed trendline breakout occurs when price breaks above a trendline but fails to sustain above it and quickly moves back below the line. This indicates a false bullish signal, where buying strength was insufficient to continue the move and sellers regained control. Such failures often trap breakout buyers and can lead to sharp pullbacks or trend reversals, especially if the price closes back below the trendline with strong selling pressure. In many cases, the broken trendline then acts as resistance, confirming weakness in the market.