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Two day reversal patterns

  • By David Bukey,
  • Active Trader Magazine
  • Technical Patterns
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These patterns take an extra day to form, but they spot turning points more accurately than standard reversal-day definitions.If you glance at any price chart, you’ll notice that market tops and bottoms seem easy to spot in hindsight. But trends reverse for countless reasons, so it is virtually impossible to identify these turning points as they are developing. Here, we re-examine reversal patterns and search for scenarios that lead to short-term weakness or strength, using the S&P 500 tracking stock (SPY). Read on to learn more.

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Article copyright 2011 by Active Trader Magazine. Reprinted from the April 2010 issue with permission from Active Trader Magazine.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
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