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Trading and Investment Terminology


A breakout is when the price moves above a resistance level or moves below a support level.

Breakouts can be subjective since not all traders will recognize or use the same support and resistance levels.

Breakouts provide possible trading opportunities. A breakout to the upside signals traders to possibly get long or cover short positions. 

A breakout to the downside signals traders to possibly get short or to sell long positions.

Breakouts with relatively high volume show conviction and interest, and therefore the price is more likely to continue moving in the breakout direction.

Breakouts on low relative volumes are more prone to failure, so the price is less likely to trend in the breakout direction.
A breakout could result in the price moving to a new 52-week high or low if a breakout occurs near the prior high/low. 

But not all 52-week highs/lows are the result of a recent breakout. A 52-week high or low is simply the highest or lowest price seen over the last year. 
A breakout is a move above or below resistance.