Stock price reversals on a weekly basis never actually disappeared, they were just hidden by the way analysts measured them.
April 26, 2026
Original Paper
Short-Term Reversal Persists Globally-If Properly Measured
SSRN · 6630998
The Takeaway
Financial experts long believed that the short term reversal effect, where yesterday's losers become today's winners, had vanished due to high frequency trading. New measurements show that this pattern is still alive and well when stock performance is compared to industry peers rather than the whole market. General market noise was masking a reliable signal that still exists within specific sectors. Traders who missed this were looking at the wrong scale of data and assuming the market had become more efficient than it really is. This finding means that predictable price swings are still happening every week for those using the right tools.
From the abstract
Short-term reversal appears to have weakened in international equity markets because standard measures mix firm-specific and industry-wide returns. When evaluated relative to industry peers, the reversal persists. Using data from 64 countries, the conventional strategy delivers negligible returns, whereas an industry-adjusted strategy earns 0.53% per month with a Sharpe ratio of 0.74. The effect reflects the reversal of firm-specific shocks masked by persistent industry components. A regret-base