Breakdown
A move of price below a defined support level or the lower boundary of a range.
How it is identified
Test: price closes below the defined level, conventionally by a stated margin or on above-average volume
Unit
qualitative
In depth
A breakdown is the mirror of a breakout and tends to be faster, because stop-loss orders sitting below support trigger into falling prices and add supply to an already one-sided book. In Indian small-caps this can interact with the lower circuit, so a breakdown becomes a locked market in which exit is impossible at any price. That interaction is the reason position size, rather than stop placement, is the effective risk control in thinly traded securities. Identifying a breakdown is a description of an event, and no continuation is predicted here.
Worked example
Support at ₹478 with 4,00,000 shares of stops resting just below. A breach triggers those orders into a book holding perhaps 60,000 shares of bids, so the fill prices land well under ₹478 regardless of where the stops were set.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Breakdown” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.