A reversal pattern characterised by an extreme spike in trading volume that exhausts the prevailing trend, signalling a potential turning point. The pattern occurs when a final surge of aggressive buying or selling produces unusually high volume relative to recent averages, draining the momentum from one side of the market. The subsequent price reversal often develops quickly as the exhausted side runs out of participants willing to continue pushing price in the same direction.
Example
“The stock hit a new 52-week low on volume five times the average, then reversed sharply to close 4% higher, forming a classic volume blowout surge reversal.”