Glossary · Technical Analysis

Breakout

When price moves beyond an established support or resistance level.

A breakout happens when price pushes through a well-watched boundary — a range high, trendline, or resistance zone — suggesting a possible start of a new directional move. Traders often prefer breakouts accompanied by rising volume.

False breakouts are common: price pokes above resistance then snaps back. That is why many strategies wait for a close beyond the level, a retest, or confirmation instead of buying the first tick through.

Example

A stock consolidates between $70 and $75 for weeks, then closes the day at $76.50 on heavy volume — a breakout above the $75 range high.