Pullback
A temporary move against the prevailing direction within an ongoing trend.
How it is identified
Test: price retraces a portion of the prior move without violating the swing point that defines the trend
Unit
qualitative
In depth
The distinction between a pullback and a reversal is only knowable afterwards, which is the central difficulty: every reversal begins as something that looks like a pullback. Practitioners therefore define the boundary in advance using the trend's own invalidation level, so that the label follows a rule rather than a hope. Pullbacks in an uptrend are commonly measured against Fibonacci retracement levels, though those levels have no established mechanism behind them. Holding a losing position while calling it a pullback is the everyday form of this error.
Worked example
A rise from ₹462 to ₹534 followed by a fall to ₹507 retraces (534 - 507) / (534 - 462) = 27 / 72 = 37.5% of the advance and leaves the prior low of ₹483 intact. A fall to ₹478 would break it, and the label would change.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Pullback” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.