Top (technical analysis)
Encyclopedia
In technical analysis
, a top is an event in which a security
's market price
reaches a high, then a higher high, and then a lower high.
The first high signifies the pressure from buy
ing was greater than the pressure from sell
ing. 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.
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
, a top is an event in which a security
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
's market price
Market price
In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics...
reaches a high, then a higher high, and then a lower high.
The first high signifies the pressure from buy
Buy
Buy may refer to:*Trade, exchange of goods and services*BUY , Burlington, North Carolina*Buy.com, a shopping website*Buy , a 1979 album by James White and the Contortions...
ing was greater than the pressure from sell
Sell
Sell can refer to:*A verb relating to sales*Sell *One of several people named Edward Sell *Mary Elizabeth Sell, New York City Ballet dancer*Friedrich L...
ing. 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.