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Finance Dictionary and Glossary of Investment Terms
Reaction
Definition 1.
A decline in prices following an advance. Opposite of rally.
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Definition 2.
A reversal of the prevailing trend in price movement for a security. The term is most often used to describe a decline after a period of rising prices. A reaction is often considered beneficial for the long term health of the market, in that the prices had risen too quickly and the drop put them back to more realistic levels. also called correction.
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Definition 3.
The typical downward movement in the price of a security after the price had previously risen.
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