What defines a swing low?

A swing low is specifically identified as a price point on a chart that is lower than the prices immediately preceding and following it. In this context, for a swing low to be established, the price must demonstrate a downward movement that culminates in a lower price than those in the previous two and following periods. This pattern indicates a potential reversal point in market behavior, suggesting that buying interest may increase after the low is established.

The definition aligns with technical analysis principles, where identifying swing points such as swing lows and swing highs is critical for traders to determine trends and potential price movements. Understanding swing lows can help traders make informed decisions regarding entry points or stop-loss placements.

The other options describe different conditions that do not meet the criteria for a swing low, either involving price levels that are not lower than their surrounding periods or establishing a price reference that isn’t definitive regarding market reversals.