Selling climaxes occur when a stock makes a 12-month low but then closes the week with a gain. They are a sign that stocks are going from weaker to stronger, more sophisticated hands. Buying climaxes occur when a stock makes a 12-month high but closes the week with a loss. They are a sign of a stock going from stronger to weaker, less sophisticated hands. This chart from Investors Intelligence shows an extraordinary number of stocks with selling climaxes compared to last year when buying climaxes were signaling stock declines. Work by Investors Intelligence shows that sellers into buying climaxes and buyers into selling climaxes are right about 80% of the time after
Courtesy of investors-intelligence.com.