10000 Elephants

Island Reversal

An Island Reversal Formation occurs when a stock price opens the next day with a large gap in the daily price movements. Then spends a few days trading at that range and opens with a large gap back to its original price location.

When an island reversal occurs when a price is moving upwards, the stock will generally move in the opposite direction.

When an island reversal occurs when a price is moving downwards, the stock will generally move in the opposite direction.