UK Accounting Glossary
An inside day is a day in which a stock’s price range falls inside the range of the previous day. In other words, an inside day occurs if a stock’s high is lower than the previous day’s high, and the stock’s low is higher than the previous day’s low. Technical analysts tend to believe that an inside day can be an indication (warning) that the market is about to reverse, if the inside day is in an uptrend and especially when the indices close in the middle or lower half of the previous day’s range. Otherwise, the direction of the close of an inside day typically isn’t noteworthy. An inside day can have an effect on a swing chart such as Gann’s Trend Indicator Line (TIL). Depending on whether the inside day occurs after a lower low follow by a higher high – or vice versa – the TIL may move. Technical analysts tend to believe that an inside day can be profitable if traded correctly. The opposite of an inside day is an outside day, or a gap.
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This glossary post was last updated: 9th February 2020.