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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.


1. In technical analysis, a situation in which the price of a security rises above a resistance level. The resistance level is a price above which a security only rarely climbs. This is a highly bullish signal because it indicates the price likely will continue to rise until it finds another resistance level.

2. In technical analysis, a situation in which the price of a security falls below a support level. The support level is a price below which a security only rarely drops. This is a highly bearish signal because it indicates the price likely will continue to fall until it finds another support level.


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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.


Stock prices fluctuate constantly, but each stock typically moves within a fairly narrow range. That means the stock's average price changes gradually, if at all. But sometimes a stock's price breaks out of its limits, and jumps or tumbles suddenly.

Usually the breakout is fueled by a particular event. The company may realize a commercial success, such as a drug company discovering a new cure for a major disease. Or a breakout may reflect a financial development, such as a new alliance with a successful partner.

References in periodicals archive ?
INDA will continue its efforts to have additional break outs established.
NASDAQ: CLFD) has announced today the addition of the FieldSmart Ribbon Break Out Box, designed to break out, manage and protect high fiber count ribbon cables, without adding to cost or installation time.
Finally, it provides an eight-year market forecast of the revenues that NanoMarkets expects from printed lighting with break outs by both technology and applications segment.
Through 15 cutting-edge, motivational and content-rich keynote presentations, business sessions, tailored break outs and revolutionary networking sessions, women will acquire the knowledge, tools and education they need to rise to the next level both professionally and personally," noted Renee.
For each of the product types that we forecast, we include break outs by protocols and data rate supported, memory type used, and specialist features included, such as enhanced traffic management or secure communications.