Higher volatility expected in the coming days! for NASDAQ:MSFT by Moshkelgosha

A good analyst always has at least 2 scenarios..!

A temporary pullback or a reversal?

The answer to this question is waiting for the coming days!

What is a Pullback?

A pullback is a pause or moderate drop in a stock or commodities pricing chart from recent peaks that occur within a continuing uptrend. A pullback is very similar to retracement​ or consolidation, and the terms are sometimes used interchangeably. The term pullback is usually applied to pricing drops that are relatively short in duration – for example, a few consecutive sessions – before the uptrend resumes.

A pullback is a temporary reversal in the price action of an asset or security.

The duration of a pullback is usually only a few consecutive sessions. A longer pause before the uptrend resumes is generally referred to as consolidation.

Pullbacks can provide an entry point for traders looking to enter a position when other technical indicators remain bullish .

What Is an Outside Reversal?

An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session. Outside reversal is also known as either a bullish engulfing (after a downward price move) or a bearish engulfing pattern (after an upward price move) when observed on candlestick charts.

Outside reversal is a two-day price pattern that implies a reversal if it runs counter to the existing trend.

The first day is typically a small range day and the second is a larger range day.

This pattern is known as an engulfing pattern in candlestick studies.

A bearish outside reversal also called a bearish engulfing , transpires when the second candle is moved lower. For instance, a stock may have a small move higher on the first day, climb even higher the second day, but then sharply decline by the second day’s end. This demonstrates that the bulls had control over the market before the bears took the reins in a meaningful way, signaling a shift in the overall trend.

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