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Absorption Reversal

An Absorption Reversal Long occurs where aggressive sellers attempt to move the market down through a key level by hitting the bid with heavy volume, but are met with buyers who “absorb” all of the selling.

This price Absorption by the buyers prevents price from continuing in its previous direction and once sellers give up and cover their positions, a move in the opposite direction can take place.

An Absorption Reversal Short is the opposite, with buyers attempting to push the price upwards at a key area, who are met with sellers absorbing the volume, therefore causing a reversal short.

Absorption generally occurs in key areas and is best observed during live market action, video or replay of market price action.

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