Term of the Day

Top (technical analysis)

A top is an event in technical analysis, where a security's prices reach a high, then a higher high, and then a lower high.

The first high signifies the pressure from buying was greater than the pressure from selling. The second higher high suggests that buying still had more pressure than the selling. The third lower high suggests that selling pressure will not let prices rise as high as the previous high. This turning point from buying pressure to selling pressure is called a top.



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