[ri-vur-suh
l] 
| 1. | an act or instance of reversing. |
| 2. | the state of being reversed. |
| 3. | an adverse change of fortune; reverse. |
| 4. | Law. the setting aside of a decision of a lower court by a higher court. |
| re·ver·sal (rĭ-vûr'səl) n.
|
Reversal
A sudden change in the price direction of a stock, index, commodity or derivative security. Also referred to as a "trend reversal", "rally" or "correction".
Investopedia Commentary
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/her existing long position and assuming a short position to capitalize on the potential downward movement of the stock's price.
Related Links
Introduction To Technical Analysis
Market Reversals And How To Spot Them
See also: Dead Cat Bounce, Derivative, Index, Pattern, Stem The Tide, Technical Analysis, Trend, Trend Analysis
reversal re·ver·sal (rĭ-vûr'səl)
n.
A change to an opposite condition, direction, or position.
A condition in which an individual has difficulty distinguishing the lowercase printed or written characters of particular letters: p from q; g or b from d; or s from z.
The change of an emotion into its opposite, as from love into hate.