Pullback Buy

Definition:

A Pullback Buy is when a price action within the context of an uptrend traces an orderly price decline/retracement/correction from the peak of an up leg.

Background:

The power of an upside move after a retracement can be greater after a strong and steady uptrend due to the possible increase of underlying support.

A Pullback Buy can be stronger when the most recent swing high is also an all time high due to the potential lack of future overhead resistance.

Practical Use:

Technical analysts will often use the Pullback Buy pattern to begin looking for buy entries as the asset reaches support or "wholesale" areas.