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Trading and Investment Terms

Key reversal day

key reversal is a one-day trading pattern that may signal the reversal of a trend. Other frequently-used names for key reversal include "one-day reversal" and "reversal day."

 

In an uptrend -- prices hit a new high and then close near the previous day's lows.

In a downtrend -- prices hit a new low, but close near the previous day's highs.

Key reversal is when the share price accelerates in an ascending trend, exceeds the current peak and after a high opening on the next day, the price falls and closes below the previous day’s trading range.

 

 In an inclining trend, the share price accelerates downwards, opens even lower on the next day, then the price increases and closes above the previous day’s trading range. 

Key reversals are characterized by large price fluctuations and high trading volume. 

Key reversals can be applied in short- and medium-term with high reliability. 

Key reversals signal trend reversals if the market is observed in weekly intervals.

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