What this unit covers
Learn to spot a breakout, price moving decisively past support or resistance, and why a breakout without volume is a weaker signal.
By the end you will be able to
- Identify a breakout as price moving decisively past a known support or resistance level.
- Read the volume bar at a breakout to classify it as confirmed or weak.
- Apply a check-volume-before-reacting habit whenever a level breaks.
How it starts: The Line That Broke
- Two stocks close above the same resistance price on the same day.
- Both moves look identical on the price chart alone.
- Which breakout deserves your attention and which deserves more waiting?
Words you will meet
- Breakout
- Price closing decisively past a known support or resistance level.
- Support
- A price level where a stock has repeatedly stopped falling.
- Resistance
- A price level where a stock has repeatedly stopped rising.
- Volume
- The number of shares traded in a given period.
- Confirmed breakout
- A breakout backed by volume clearly above the recent average.
In this module: Reading Charts
- Chart Patterns
- Breakouts (this unit)
- Pullbacks
- Volume Confirmation
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