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What are Breakouts?

What are Breakouts?

Breakouts are events where a stock or index suddenly changes the magnitude and direction of its trading range and a new level of support and resistance is defined.

A stock or index might bump up against the same support or resistance level for some time, or experience a time of consolidation and horizontal movement before the price breaks the upper limit of resistance and a new high is attained.

Sometimes prices consolidate or hit resistance levels as the markets and investors wait to see what some news will be about the condition of the economy and so forth. Once there is good news, investors might take it as the “go-ahead” sign, and the price will breakout from the previous range.

What is Backtesting?
What is Fourier Analysis?

Keywords: investor sentiment, day trading, support and resistance, resistance line, chart analysis, breakpoint, trading range, market news, breakout,