reversal pattern

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Reversal Pattern

In technical analysis, any pattern on a chart that indicates a previous trend is changing to a new trend. Generally speaking, any trend in which the highs are lower than the previous highs is a bearish reversal pattern, while any trend in which the lows are higher than the previous lows is bullish. However, some reversal patterns are more complex. Examples include a head-and-shoulders pattern and an outside reversal.
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reversal pattern

In technical analysis, a chart formation that indicates a market top or a market bottom. A reversal pattern, which usually occurs after a major movement in the price of a stock or in the entire market, is an indication that investors should adjust their positions to take advantage of the coming change in market direction. A saucer and a head-and-shoulders are reversal patterns.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Northcott is a freelance writer, engineer and investor, and he covers the history and fundamentals of candlestick charting before proceeding to the "psychology of the candles" and the patterns that denote continuation and reversal patterns. The author also shows how this type of charting can be applied to trading psychology and money management, and he supplied appendices that contain practice charts, a glossary and further resources.
<strong>Bearish Reversal Patterns:</strong>
<strong>Bullish Reversal Patterns:</strong>
Companies reported temporary basis differences that have unique reversal patterns giving rise to deductions not expected to occur until far beyond the reversal of existing taxable differences.
Possible reversal patterns have formed with activation level coming with a confirmed break above the resistance level," MENACORP said in a note.
Another one of the reversal patterns, the triple top or bottom, is a variation of the <a href="http://www.ibtimes.com/articles/20090821/head-and-shoulders-forex-chartanalysis-technical-analysis-channel.htm">Head and Shoulders</a>.
The Head and Shoulders* The head and shoulders is the best known and probably the most reliable of the reversal patterns. A head and shoulders top is characterized by three prominent market peaks.
Dubai: Keep a closer eye on the US markets this week as possible reversal patterns are developing on a couple of major indices and strong selling was seen on Thursday, the last trading day before a long holiday weekend.