Breakout stocks are often identified by the use of algorithms that track price momentum and volume spikes. Many investors believe that these stocks can provide opportunities for outperformance that traditional investments may not.

A breakout stock is one that moves beyond its level of support or resistance. Technical analysts use breakouts to predict when a stock will make a big move. When a stock breaks through its resistance level, it often continues on an upward trajectory. It could be on the verge of a bear run if it breaks through its support level. Support and resistance levels are considered 'stronger' if a stock repeatedly crosses them.

Equities are more likely to go on prolonged rallies after breaking over these 'stronger' obstacles. Equities are not the only asset class that breaches resistance and support levels. Breakouts can occur in any market that technical traders like, including commodities, currencies, and cryptocurrencies.

Breakout stocks are stocks that experience a sudden, dramatic increase in price after trading for some time at a relatively low price. This can be caused by any number of factors, but there are two primary reasons why the stocks break out. The first is that the company produced an incredible product or service that gained widespread popularity, which created the surge in demand.