A breakout occurs when price advances beyond the edge of a congestion pattern or trading range, as well as when passing beyond some support or resistance level. Typically, the term "breakout" is used to describe upside moves, while "breakdown" is used to describe similar price moves to the downside.
In the chart above, shares of Halliburton were trading sideways in a narrow price range for more than a week. The breakout occurred as the stock rallied to close above the highest level of the preceding price range, and continued to move higher.
Articles that match the tag: Breakout
One of the most important aspects of trading a breakout is timing. And with this one strategy, Matthew Cherry will help you to understand the components of a price breakout and the psychology behind it, which can effectively take a lot of the guess work out of trading breakouts.
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