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A breakout is a term used in technical analysis to describe a situation where the price of an asset moves beyond a defined support or resistance level with increased volume. Breakouts can signal the start of a new trend, either bullish or bearish, depending on the direction of the breakout.
Characteristics of a Breakout:
Price Movement: The price moves above a resistance level (bullish breakout) or below a support level (bearish breakout).
Volume: A breakout is often confirmed by an increase in trading volume, indicating strong interest and momentum behind the price movement.
Follow-Through: After the initial breakout, the price should continue to move in the direction of the breakout. Lack of follow-through can indicate a false breakout.
Characteristics of a Breakout:
Price Movement: The price moves above a resistance level (bullish breakout) or below a support level (bearish breakout).
Volume: A breakout is often confirmed by an increase in trading volume, indicating strong interest and momentum behind the price movement.
Follow-Through: After the initial breakout, the price should continue to move in the direction of the breakout. Lack of follow-through can indicate a false breakout.
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