Outside Reversal

Outside Reversal marks a potential stock chart trend reversal point. An Outside Reversal occurs when a stock's high and low prices for the day exceed those of the previous trading session.

Outside Reversal

Outside Reversal marks a potential stock chart trend reversal point.

 


Outside Reversal Identification

An Outside Reversal occurs when a stock's high and low prices for the day exceed those of the previous trading session.

Illustration of an outside reversal

Illustration of an outside reversal



Application of Outside Reversal

If the outside reversal pattern should occur at or near a resistance level, then it is viewed as a bearish signal; if it occurs at or near a support level, then it is viewed as a bullish signal.

The outside reversal pattern is called a "bearish engulfing" pattern in candlestick terminology if the second bar is a down candlestick, and a "bullish engulfing" pattern if the second bar is an up candlestick.

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