A breakout is a bullish technical analysis term depicting a price move
that exceeds a defined resistance level and proceeds to sustain higher
prices until the next resistance level is formed. The opposite is true for a Breakdown, ie., when price breaks a defined support level to sustain lower prices until the next support is formed. Breakouts are usually accompanied with a surge in volume indicating motivated buying demand that surpasses existing supply as prices rise. Breakouts indicate the potential for the price to start trending in the breakout direction. This example of breakout ill come back to, once im done explaining types of breakouts. Next slide Reversal breakout- When after a sharp downtrend, price breakouts immediately into an uptrend, indicating a V- shaped formation, its called reversal breakout. The price of the stock doesnot take any kind of rest before starting a new trend, in this case. So, first identifying a preceding trend is important. Next slide- Consolidation breakout-