Breakout

A breakout happens when a stock's price moves decisively above or below a level it's been stuck near for a while. Think of it like a price ceiling or floor that finally gets broken through. You'll hear traders talk about breakouts because they often signal the start of a new trend—either upward momentum or downward pressure. The idea is that once a price breaks through that barrier, it tends to keep moving in that direction. For example, if TechCorp stock has bounced between $50 and $52 for months, and suddenly jumps to $55, that's a breakout above resistance. Retail investors watch for breakouts because they can be entry points for trades, though breakouts don't always work out—sometimes a stock breaks out and reverses just as quickly.