Tuesday, May 12, 2015

BREAKOUT


BREAKOUT

A price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Traders will buy the underlying asset when the price breaks above a level of resistance and sell when it breaks below support. 

Breakout


This chart shows a stock that has historically encountered a lot of resistance near $37, but notice how it heads sharply higher following the breakout.