A key reversal is a one-day trading pattern that may signal the reversal of a trend. Other frequently-used names for key reversal include "one-day reversal" and "reversal day."
How Does a Key Reversal Work? Depending on which way the stock is trending, a key reversal day occurs when: In an uptrend -- prices hit a new high and then close near the previous day's lows. In a downtrend -- prices hit a new low, but close near the previous day's highs