breakout

Breakout

A chart pattern used to indicate a rise in a stock's price above its resistance level (such as its previous high price) or a drop below its support level (commonly the last lowest price).

This chart image shows a stock breaking below its support level.

Notes:

The assumption is that a stock will continue to move in the same direction following a breakout, generating a buy or sell signal.

See also: Breakout Trader, Chartist, Pattern, Resistance, Reversal, Support, Technical Analysis, Trend, Triangle

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Breakout

A rise in a security's price above a resistance level (commonly its previous high price) or a drop below a level of support (commonly the former lowest price.) A breakout is taken to signify a continuing move in the same direction. Can be used by technical analysts as a buy or sell indicator.

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breakout The advance of a stock price above a resistance level, or the fall of a stock price below a support level. A breakout, especially one on relatively heavy volume, indicates to technicians that the security is about to make a major price movement in the direction indicated by the breakout. Thus, if a breakout is upward, a major upward price movement can be expected. A breakout on relatively low volume is suspect. See also break through, congestion area.

breakout