Pullback

A pullback is a temporary dip in a stock's price after it's been climbing. Think of it like taking a step backward before moving forward again. You'll hear traders mention pullbacks when analyzing price charts, because they're useful for spotting good entry points—moments when a rising stock pauses and becomes cheaper before resuming its upward trend. Pullbacks matter because they help you avoid buying at the absolute peak. For example, if TechCorp stock has been rising steadily but suddenly drops 5% in a week, that dip might be a pullback rather than a sign the company is in trouble. The key difference: a pullback is temporary and happens within an overall uptrend, whereas a reversal means the trend has actually changed direction.