Reversal zones: tops and bottoms

The other two types are reversal zones; they appear at the ends of a move, forming a top or a bottom and flipping the trend. These two are generally considered stronger than the continuation types, because they represent a decisive intervention that tipped the market’s balance.

The shape

• Drop-Base-Rally — a demand zone that forms a bottom: a fall, then a base, then a reversing rise. There the trend turns from down to up.
• Rally-Base-Drop — a supply zone that forms a top: a rise, then a base, then a reversing fall. There the trend turns from up to down.