What Is a Reversal? Definition, Identification & Examples

What Is a Reversal? Definition, Identification & Examples

What does it mean when an asset experiences a reversal?

Within financial markets, a reversal would have occurred when the direction of an asset’s price movement changes. For example, if a stock has been falling in price fairly consistently for a month or so, it suddenly starts to rise in value over an extended period of time, that stock can be described as a reversal. The same goes for a stock that has been rising in price for a year and then suddenly starts to lose value.

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