Breakout
Definition
When price moves above resistance or below support with increased volume, signaling potential continuation.
Detailed Explanation
A breakout occurs when an asset's price moves above a resistance level or below a support level, typically with higher than average volume. Breakouts signal that the balance between buyers and sellers has shifted, potentially starting a new trend. Valid breakouts require volume confirmation - without it, they often fail (fakeouts). Traders enter on breakouts expecting the move to continue in the breakout direction.
Example
SPY trades between $450-$460 for weeks. When it closes above $460 on 2x average volume, it's a confirmed breakout. Target: measured move to $470.