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Identifying short-term trend reversals in stock market trading requires using a combination of technical indicators to confirm potential changes in direction. Here are some popular indicators that traders use for short-term trend reversal identification:Moving Averages: Short-term moving averages (e.g., 10-day or 20-day) crossing above or below longer-term moving averages (e.g., 50-day or 200-day) can signal short-term trend reversals.Relative Strength Index (RSI): RSI measures the magnitude of recent price changes to determine overbought or oversold conditions. RSI values above 70 indicate overbought conditions, while values below 30 suggest oversold conditions. Reversals may occur when RSI reaches extreme levels and then starts to reverse direction.MACD (Moving Average Convergence Divergence): MACD combines moving averages to identify trend changes and potential buy or sell signals. Short-term trend reversals may be indicated when the MACD line crosses above or below the signal line.
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