Which one of these indicators displays the most stereotypical type of mean-reversion analysis?

Understand the Problem

The question is asking which of the four provided charts is most representative of mean-reversion analysis in trading. Mean-reversion analysis typically looks for price levels that are likely to revert back to the mean or average.

More Information

Mean-reversion analysis often uses indicators like Moving Averages and Bollinger Bands to signal when prices are expected to return to the mean.

Tips

Avoid confusing momentum indicators with mean-reversion ones. Mean-reversion focuses on returning to an average value.

Sources

• Mean Reversion Indicators - CliffsNotes - cliffsnotes.com
• Mean Reversion Analysis - Investopedia - investopedia.com