Selling Climax

A selling climax refers to a situation where there is an extremely high volume of selling in a market, often signaling the end of a prolonged decline in prices. During a selling climax, prices may drop sharply as investors panic and rush to sell, but this mass liquidation can also mark a turning point where buying interest starts to reemerge, potentially leading to a price rebound.

Example

In a bear market, a selling climax might occur after months of declining stock prices, with investors selling in large quantities. However, the heavy volume of selling can eventually attract buyers who view the assets as oversold and undervalued.