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 movers to the downside.
In the chart above, shares of HAL 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.
Breakout is the opposite of breakdown.