What is the false breakout in the stock market?

Finance
#1

One of the indicator of a fakeout is the volume. When price breaks the resistance or support level with the decreasing volume, most of the time it results in price reversal. Also, breakouts are always results of a some kind of forming chart pattern like pennants, flag, triangle etc.

Any random price movement without any confirmation may leads to a fake breakout. Apart from this time frame for which a stock is consolidating in a range also helps in determining a breakout. Hence, a breakout offers a great opportunity to trade confirming an emerging trend, if identified in the early stage.