As your stock or the market up moves up, at some point there will be a realization on the part of the general public that they are being left behind. They missed buying in the Trading Range, they missed buying on the way up, and now, the stock is calling attention to itself by virtue of its high price. Often this is accompanied by news reports on how well the company is doing. The Composite Operator has been waiting for this opportunity to unload his shares. He started unloading on Preliminary Supply, and now he has his best opportunity. The price action on the Buying Climax will come with wider price spread indicating the buying frenzy, and increased volume, more so then has been seen anywhere in the uptrend. The closing prices will be in the top of the price range as the price moves day by day to the top of the climax. In rare cases Preliminary Supply can sometimes have higher volume then the Buying Climax.but not often. The clues that you are looking for to determine if this rally is the Buying Climax are as follows: You have just seen a deep reaction in the uptrend that was accompanied by heavy volume, and a widening of price spread to the downside (Preliminary Supply). Your point and figure chart objective range is within reach of the next rally, the price rallies aggressively with wide spread and heavy volume, closing near the highs, possibly causing an overbought condition.

The more of these clues you have, the better. Exiting on the Buying Climax is our most favorable exit strategy (See Money Management).

Buying Climax