From Investopedia :
Pullbacks vs. Reversals
Pullback and reversals both involve a security moving off of its highs, but
pullbacks are temporary and reversals are longer term.
How do you distinguish the two?
Most reversals involve some change in a security’s underlying
fundamentals that force the market to reevaluate its value. For example, a company may report disastrous earnings that make investors recalculate a stock’s
net present value. In the
futures market, a downturn in automotive demand could lead to lower demand for steel and other
commodities, which would be expected to continue over a long period of time.
In contrast, pullbacks typically don’t change the underlying fundamental narrative. They are usually profit-taking opportunities following a strong run-up in a security’s price. For example, a company may report blow-out earnings and see shares jump 50%. The stock may experience a pullback the next day as short-term traders
lock in profits. But the strong earnings report suggests that the stock is still headed higher over the long-term.
The Bottom Line
Pullbacks are widely seen as buying opportunities after a security has experienced a large upward price movement. They shouldn’t be confused with reversals, which tend to be longer term downtrends where there has been a change in fundamentals. Traders should be sure to use technical analysis to verify that a pullback remains above key support levels to avoid possible longer term reversals that could result in losses.
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Pullback https://www.investopedia.com/terms/p/pullback.asp#ixzz5AGZaEuSG
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