Range breakout
Price closes above the top or below the bottom of a flat range that lasted at least 20 bars.
What it shows
A range is a stretch where price stayed between two lines without moving far. A breakout is when a close lands outside the range.
The rule is simple: the high-low width of the last 20 bars is under 10% of price, and today's close is beyond it.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find the high and low of the previous 20 bars.
- Check the width is under 10% of price.
- Today's close beyond the high or low.
- Mark the break.
Starting values: Range 20 bars; Width under 10%. These are proposed and will be tuned on real price data before launch.
How to read it
- The shaded block is the range.
- Price leaves it at the gold dot.
- Lines mark the top and bottom.
Status labels you may see
| Label | What it means |
|---|---|
| Above range | Close above the top. |
| Below range | Close below the bottom. |
| Inside | Close inside. |
What cancels it
Ends when price closes back in the range.
What traders check next
- Volume at the break.
- How long the range lasted.
- Retest of the line.
Limits
- Many breaks fail.
- Width limit is a choice.
- Rectangles share this idea.
Try it in forecastviz
- Open any ticker and choose Gaps and breakouts → Range breakout in the left menu.
- Switch between 3M, 6M, 1Y to see how the picture changes.
- Compare with Rectangle and Base breakout on the same chart.
Questions
Related to the rectangle?
Yes. The rectangle is the chart pattern of the same shape.
Does a longer range matter?
Some books say so. We make no claim.
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.