Reversal
A reversal is a change in the overall price trend direction: an uptrend becomes a downtrend, or vice versa. Unlike retracements which are temporary, reversals signal a fundamental shift in market sentiment and can last months to years.
Understanding the Concept
• Often marked by reversal patterns (head and shoulders, double tops) • Volume typically spikes during true reversals • Difficult to identify in real-time (looks like retracement initially) • Confirmation often requires breaking key support/resistance
Real-World Example
After a two-year uptrend, a stock forms a head-and-shoulders pattern at $200. It breaks the neckline at $170 on huge volume. This isn't a normal pullback; it's a reversal. The stock continues to $100 over the next year. Those who recognized the reversal pattern sold near the top.
How Strykr Helps
Strykr's AI monitors Reversal signals across 5,000+ assets in real-time. Get instant alerts when significant patterns emerge, with context about market conditions and confluence factors.
Try Strykr Free