Reversal

A reversal is a change in the direction that an asset's price is moving. Either an upward or downward reversal can happen. Following a significant price increase, a downward trend reversal could be expected. The opposite is true, that following a steep decline in price, a trend reversal could take place. Reversals usually don't depend on a single period or two bar charts; instead, they depend on the general price direction. Some indicators, like a moving average, oscillator, as well as support and resistance levels, such as trend lines, channels and other technical patterns, may be useful for identifying trends and reversals.