A minor pullback or change in the direction of a stock, index, or other financial instrument. Retracements differ from reversals in the sense that once they are over, there should be a continuation of the previous trend. Also, in a reversal, the price of a security needs to breach support or resistance levels. Instead, a retracement is a short-term period of movement against a trend. Of note, within technical analysis, a retracement must be taken within its own context and never in a vacuum. If not used correctly, any potential analysis will be misguided.