Pull Back: what it is – Dictionary of Economics

Definition of ‘pull back’

In stock market technical analysis, it refers to the movements of return or retreat in the price (up or down) towards a previous movement of breaking support, resistance, significant trends or graphic or chart formations that have been previously completed. Therefore, they are opportunities to buy or sell securities, depending on whether it is the breakout of a price level or a bullish or bearish technical formation.

Not every time a trend line is broken, a pullback occurs, but when it does, it is a signal that confirms the strength of the new trend that has just started.

In any graphic analysis figure (triangles, rectangles, shoulder-head-shoulder, etc.) a pullback can occur when said figure is broken. The pullback is a confirmation of the validity of the move.