Business, Legal & Accounting Glossary
A breakout occurs when the price of a stock breaks through a resistance level, often on high volume.
The resistance level is usually a price ceiling at which the stock has previously encountered selling. In many cases, but not always, that resistance level is the highest point in a “handle” portion of a base pattern.
Technical traders will buy the security when a price breakout occurs as it is likely that additional buying pressure will follow.
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This glossary post was last updated: 23rd March, 2020 | 3 Views.