A retracement refers to the temporary reversal of an overarching trend in a stock’s price. Distinct from a reversal, retracements are short-term periods of movement against a trend, followed by a return to the previous trend. The chart below is of General Electric Co. (GE), and it is showing that the stock is in a downtrend. However, there are points on the chart that indicate that the price is rising, which would be considered a retracement.
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