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.
A stock in breakout may be trading sideways in a narrow price range for more than a week. The breakout occurs as the stock rallies to close above the highest level of the preceding price range, and continues to move higher.
Breakout is the opposite of breakdown.