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A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits by Michael C. Thomsett

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Trend Climax and Gap Patterns

A trend climax is likely to be accompanied by volume spikes or surges and by long days (broad trading range within a session), gaps, and strong reversal signals. The trend climax often sets up exceptionally strong reversal signals and confirmation.

For example, the chart in Figure 9.6 covers two years and highlights several features: a six-month flip from resistance to support, then back to resistance; a volume surge; a downtrend climax with a very strong volume spike; and then a return to very low volume and rising prices. The two-year period is a primary bull trend.

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Figure 9.6 Trend climax—two-year chart (Chart ...

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