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Reversal

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Dictionary Says

Definition of 'Reversal'

A change in the direction of a price trend. On a price chart, reversals undergo a recognizable change in the price structure. An uptrend, which is a series of higher highs and higher lows, reverses into a downtrend by changing to a series of lower highs and lower lows. A downtrend, which is a series of lower highs and lower lows, reverses into an uptrend by changing to a series of higher highs and higher lows.

Also referred to as a "trend reversal", "rally" or "correction".

Reversal
Investopedia Says

Investopedia explains 'Reversal'

A reversal can be a positive or negative change against the prevailing trend. Technical analysts watch for these patterns because they can indicate the need for a different trading strategy on the same security.

For example, if a technical analyst holds stock ABC and notices a reversal pattern, he or she may want to consider closing his or her existing long position and assuming a short position to capitalize on the potential downward movement of the stock's price.

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  5. Introduction To Technical Analysis Price Patterns

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  6. Forex: The Memory Of Price Strategy

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  8. Candle Sheds More Light Than The MACD

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