5. Reversal Patterns—End of the Trend
The confirmation of primary trends in the DJIA, obtained by tracking other Dow Jones indexes, is far from clear. A turn in price is controversial, and there isn’t a universal agreement about whether a reversal is a secondary trend or a new primary trend. The same problem is found in tracking individual stocks. When does a primary trend end, and how do you spot it?
This is the core problem of trend analysis. A reversal might represent a new direction for the stock for coming months or years. It might also be a secondary trend, with the primary trend in effect for the longer term. It can be a swing trend that will last only a few days. It can also be merely a retracement.
Key Point
A reversal can have numerous ...
Get A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
