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.

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