A breakout occurs when the price moves decisively above a resistance level or below a support level that it has struggled to cross earlier, signaling a shift in market sentiment and momentum. It shows that buyers or sellers have gained enough strength to push the price beyond a key barrier, often leading to increased volume and the potential for a strong directional move. Breakouts are important because they confirm the end of consolidation and the start of a new trend, giving traders an opportunity to enter early in the momentum.