A reversal pattern that occurs when an asset experiences its highest volume of a recent period at the end of a sustained trend, indicating that the dominant participants have exhausted their buying or selling capacity. The climactic volume bar often features a wide range and closes near the opposite end of the move, suggesting a handoff from one group of market participants to another. Volume climax reversals are particularly significant when they coincide with key support or resistance levels.
Example
“After a 30% decline over six weeks, the stock printed a volume climax reversal with record daily volume and a bullish hammer candle at long-term support.”