Definition of breakout in finance

A breakout is a term used in technical analysis for trading and refers to the price movement of an asset through a level of support or resistance. A breakout will usually involve large volumes being traded and high volatility.

When an asset breaks through a level of resistance, it is likely that it will spike upwards in price and when it breaks through a level of support, it will most likely crash in price. This is because the levels of support and resistance are generally accepted 'safe zones' and a breakout refers to something unusual happening in the market so any effects tend to be exaggerated, at least in the short term.