A breakout is when the price rises above a resistance level or falls below a support level.
Breakouts can be subjective as not all traders recognize or use the same support and resistance levels.
Breakouts provide possible trading opportunities. An upside breakout signals to traders that they may be going long or covering short positions. A break down signals traders that they may go short or sell long.
Breakouts with relatively high volume show confidence and interest, and therefore the price is likely to continue moving in the direction of the breakout.
Breakouts on low relative volume are more prone to failure, so price is less likely to move in the direction of the breakout.
A bullish engulfing pattern is a candlestick pattern that forms when a small black candlestick the next day is followed by a large white candlestick whose body completely overlaps or engulfs the body of the previous day’s candlestick.
The Guppy Multiple Moving Average (GMMA) is a technical indicator that identifies changing trends, breakouts and trading opportunities in the price of an asset by combining two groups of moving averages (MA) with different time frames.