Island Reversal

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DEFINITION of 'Island Reversal'

An occurrence in technical analysis where a stock price will gap up/down, trade higher than this price, and then gap down/up below the initial price.

INVESTOPEDIA EXPLAINS 'Island Reversal'

When a stock indicates an uptrend, trades above the gap which occurs, then gaps back down and trades below the initial price, an island reversal has occurred.

RELATED TERMS
  1. Gap

    A break between prices on a chart that occurs when the price ...
  2. Reversal

    A change in the direction of a price trend. On a price chart, ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Runaway Gap

    A type of gap on a price chart that occurs during strong bull ...
  5. Exhaustion Gap

    A gap that occurs after the rapid rise in a stock's price begins ...
  6. Breakaway Gap

    A term used in technical analysis. A breakaway gap represents ...
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