Bull Trap
Also called: Bull trap, bull-trap, false breakout, false bullish breakout, failed breakout, fake breakout, false upside breakout.
How it is read
You can usually only name a bull trap after the fact. Price pokes above resistance, often on a candle close or an intraday spike. Then it closes back below the same level, frequently on rising volume during the reversal. Observers commonly read that as demand above resistance being too weak to hold the breakout. The broken level is then often watched as resistance again. The pattern is only a reading of price and volume around a known level. It is not a signal of what price will do next.
What it does not tell you
You can only confirm a bull trap in hindsight. While price is above resistance, there is no sure way to tell a real breakout from a trap that will fail later. The label does not tell you how far price will fall, or how long the reversal lasts. It does not say whether the level will be retested and broken cleanly later. It is easy to mislabel normal intraday swings, a brief overshoot, or an ordinary pullback after a valid breakout as a bull trap. The pattern says nothing about the fundamentals or news behind the move.
Related concepts
Bull Trap / False Breakout: When a Resistance Break Fails
A bull trap is a false breakout. Price moves above a watched resistance level, fails to hold, and closes back below it. Late breakout buyers are left offside. Many breakouts do hold, so the label belongs only to the ones that fall back into the range. Like a bear trap, it can be confirmed only after the failure. The broken level is commonly watched as resistance again afterwards.
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