Pullback

DEFINITION of 'Pullback'

A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum.

BREAKING DOWN 'Pullback'

Often pullbacks are seen as buying opportunities after a security has had a large upward price movement. It is important, however, to analyze closely any pullback as it may be a sign of a definite trend reversal or a slight pause in the upward trend, each having very different trading implications.

RELATED TERMS
  1. Toppy

    A slang term used when markets are reaching highs that are unstable, ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Retracement

    A temporary reversal in the direction of a stock's price that ...
  4. Reversal

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

    A method of evaluating securities by analyzing statistics generated ...
  6. Low Volume Pullback

    A technical correction toward an area of support that occurs ...
Related Articles
  1. Active Trading

    Why A Falling Stock Is Not Always A Bargain

    Learn how to successfully trade pullbacks and to avoid being crushed by "falling safes."
  2. Stock Analysis

    The 3 Best Buy-and-Hold Canadian Stocks

    Learn how the market is misreading Canadian stocks and how long-term buy-and-hold investors can stand to benefit from the misrepresentation.
  3. Stock Analysis

    Long-Term Outlook For Duke Energy

    Learn why Duke Energy is showing both positive and negative signs for long-term investors, and understand how an interest rate increase may impact the company.
  4. Trading Strategies

    Introduction To Technical Analysis Price Patterns

    To "find your game" in technical analysis, you need to be able to recognize reversals and continuations as they form.
  5. Active Trading

    Peak-and-Trough Analysis

    Prices never move in straight lines, so it's time to learn about this powerful trend-following technique.
  6. Active Trading Fundamentals

    Find A Trend With The Partial Retrace

    Learn how to spot the pivot point from which a new movement will emerge.
  7. Investing Basics

    5 Questions First Time Investors Should Ask in 2016

    Learn five of the most important questions you need to ask if you are a new investor planning on starting an investment program in 2016.
  8. Stock Analysis

    The Biggest Risks of Investing in Verizon Stock (VZ)

    Read about some of the biggest risks of investing in Verizon stock. While the company has a good dividend and value pricing, there are risks.
  9. Mutual Funds & ETFs

    The 3 Best American Funds for Value Investors in 2016

    Learn about value investing and how interest rate hikes benefit mutual funds, and the top three American Funds mutual funds for value investors.
  10. Chart Advisor

    These 3 ETFs Suggest Commodities Are Headed Lower (COMT,CCX,DBC)

    The charts of these three exchange traded funds suggest that commodities are stuck in a downtrend and it doesn't look like it will reverse any time soon.
RELATED FAQS
  1. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  2. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  3. What is the 'Rule of 72'?

    The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of ... Read Full Answer >>
  4. What is a stock split? Why do stocks split?

    All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision ... Read Full Answer >>
  5. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  6. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
Hot Definitions
  1. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  2. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  3. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  4. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
  5. Godfather Offer

    An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium ...
Trading Center