Trends/Gaps and breakouts

Base breakout

Price closes above the high of a long sideways stretch after a rise.

Gaps and breakoutsBest on 6M, 1YAlso called breakout from a base

Illustration of the base breakout shape. It is a sketch, not real price data.

What it shows

A base is a stretch of at least seven weeks in which price moves sideways in a band after an earlier rise. A base breakout is a close above the top of the base.

This idea is used in William O'Neil's method. We show it as a description of a chart state.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find a prior rise of at least 20%.
Find 35 or more bars in a band under 15% wide.
Mark a close above the top of the band.
Show how many bars the base lasted.

Starting values: Base length 35 bars; Width under 15%; Prior rise 20%. These are proposed and will be tuned on real price data before launch.

How to read it

The shaded block is the base.
Price was rising before it.
The gold dot is the close above the top.

Status labels you may see

Label	What it means
Breaking out	Close above the base top today.
In a base	Price inside the base band.
None	No base.

What cancels it

Cancelled when price closes back inside the base.

What traders check next

Volume at the break.
Length of the base.
Distance from the previous high.

Limits

Breakouts often fail.
Thresholds are choices.
Needs weekly data for best effect.

Try it in forecastviz

Open any ticker and choose Gaps and breakouts → Base breakout in the left menu.
Switch between 6M, 1Y to see how the picture changes.
Compare with Flat base and Cup and handle on the same chart.

Open on a ticker

Questions

Is this like a flat base?

Yes, a flat base is one kind.

Who uses it?

O'Neil and followers.