Failed breakdown
Price closes below support, then closes back above within a few bars.
What it shows
A failed breakdown is the downside version of a false breakout. Price closes below a support level, but within 3 bars it closes back above.
In the Wyckoff method this is called a spring when it comes at the end of a range.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find a support level, such as a 40-bar low.
- A close below by at least 0.5%.
- A close back above within 3 bars.
- Mark the failed close.
Starting values: Level 40-bar low; Margin 0.5%; Return within 3 bars. These are proposed and will be tuned on real price data before launch.
How to read it
- The dashed line is support.
- Price dipped below it and closed back above.
- The gold dot marks the failed close.
Status labels you may see
| Label | What it means |
|---|---|
| Recent | A failed breakdown in the last 10 bars. |
| Break holding | Below the level, within 3 bars. |
| None | None found. |
What cancels it
Applies once price is back above.
What traders check next
- Volume on the dip.
- Whether support is retested.
- Size of the move.
Limits
- Defined after the fact.
- Margins are choices.
- Many dips continue.
Try it in forecastviz
- Open any ticker and choose Gaps and breakouts → Failed breakdown in the left menu.
- Switch between 3M, 6M to see how the picture changes.
- Compare with False breakout and Horizontal support on the same chart.
Questions
What is a spring?
A failed breakdown at the end of a base, in Wyckoff's terms.
Is it a Buy signal?
No.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- Murphy, Technical Analysis of the Financial Markets
- Crabel, Day Trading with Short Term Price Patterns
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.