- Home »
- Terms »
- Fundamental Analysis »
- Alpha
Breakout
Breakout defines a price move through previously determined areas of resistance or support.
.
Normally traders would buy the assets when the price breaks above the resistance point (its previous high price) and sell when it breaks below (previous low price). Once a resistance is broken, it will become the next support level. Breakouts are usually followed by large trading volumes of the shares in question and high volatility.
Breakouts are also indicative of potential future evolutions. When a breakout occurs on high volumes of trading, it signals to traders that the respective shares will make key price movements in the direction indicated by the breakout. Thus, if the shares broke a resistance point, the price would go upward, while if the breakout was on a support level, the share price would start to decrease.
Breakouts can be caused by specific events – discovery, development, partnerships and alliances, or financial evolutions (for instance, major discoveries or inventions with high marketing potential, an announcement or anticipation of a partnership merger or a takeover).
.RELATED TERMS
Free newsletter
Click here to receive TheBull's free newsletters on stocks, trading, investing and more.
- Airbnb, Uber woes show Japan does... 27.06.2018 04:19 PM
- Tokyo's Nikkei index edges down 27.06.2018 04:14 PM
- Air New Zealand fined in Australia... 27.06.2018 04:02 PM
- Hong Kong stocks down at lunch 27.06.2018 03:53 PM
- Twitter to confirm new accounts in... 27.06.2018 03:49 PM
- Canada oil sands plant shut down,... 27.06.2018 12:05 PM
MoreRELATED ARTICLES
Takata close to filing for bankruptcy: report
Japan's scandal-hit airbag maker Takata is expected to file for bankruptcy protection as early as this month as it prepares to sell its assets to a US company, a report said Friday.
Money or happiness?
The problem with money is that it can only buy so much.
Fear the no-grow zone: has technological innovation reached its final frontier?
The economic profession lacks a unified theory of economic growth.
RESOURCES & OFFERS
Free Investing Newsletter on Asian and Australian markets. Be ahead of the curve with TheBull.
Read more
Join CommSec now and get $600 free brokerage.
Find out more