Pullbacks to the Pivot

Why many breakouts dip back toward the breakout level, how to tell a healthy retest from a failure, and how traders use the pullback as a second entry.

The breakout is not a straight line

After a stock breaks out, it rarely goes straight up. Many breakouts drift back toward the pivot within days or weeks as short-term traders take quick profits. This is called a pullback to the pivot, or a retest. It can feel alarming if you just bought, but a healthy pullback is normal.

The logic comes from role reversal. The pivot was resistance before the breakout. After the breakout, buyers who missed the first move often wait for price to return to that level, so old resistance can act as new support.

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