Breakout and Breakdown
In trading, a breakout refers to a price moving outside of a defined support or resistance level. A breakout can occur on the upside, when the price moves above resistance, or on the downside, when the price moves below support. Breakouts are often seen as a sign of increased market momentum and can lead to further price moves in the direction of the breakout.
In the example above, we see that the price of Tesla is stuck between the 252.07 area of resistance and the 208.76 area of support. Price is ranging between these two areas and has no clear directin. When price brokeout of the 252.07 area, we see a sustained move to the upside
A breakdown, on the other hand, refers to a price moving below a support level. A breakdown can be seen as a sign of weakness in the asset and can lead to further price declines.
Conversely, in the same above example, we see that when price broke down the 208.76 level, price has a sustained move to the downside.
Breakouts and breakdowns can be caused by a variety of factors, including changes in market sentiment, fundamental developments, or technical signals. Traders and investors often watch for breakouts and breakdowns and may adjust their positions accordingly. It's important to note, however, that breakouts and breakdowns can be false and may not lead to sustained trends, so it's important to carefully consider the context and confirm the move with other technical or fundamental analysis before making trading decisions.