Blow-off top

Blow-off top

A steep and rapid increase in price followed by a steep and rapid drop. This is an indicator seen in charts and used in technical analysis of stock price and market trends.

Blow-Off Top

A sudden, rapid increase in a security's price followed by an equally sudden, rapid decrease. A blow-off top can result in large short-term gains, provided one sells the security at exactly the right moment. Just as likely, however, is the possibility that one will incur a loss by buying at the top price. A blow-off top can result from either sudden news or a rumor. See also: Reversion to the mean.
References in periodicals archive ?
The EURUSD could of course make a new high (above 1.4850), but it would be in a blow-off top. If the pair does spring to a new high (above 1.4850), then resistance is anywhere from the psychological 1.5000 to the line that is extended from the March and June highs (at 1.5372 next week).
New Zealand Dollar / US Dollar Kiwi has gone vertical in what may be a blow-off top. I wrote yesterday that "the pair is at its highest level since August 2008 and levels to keep an eye on are .7250 (Fibonacci extension which is discussed in FX Technical Weekly), .7382 (January 2008 low) and .7444 (June 2008 low)." I neglected to mention a channel mid line, which has held as resistance thus far (near .7300).
New Zealand Dollar / US Dollar Kiwi has gone vertical in what may be a blow-off top. The pair is at its highest level since August 2008 and levels to keep an eye on are .7250 (Fibonacci extension which is discussed in FX Technical Weekly), .7382 (January 2008 low) and .7444 (June 2008 low).
New Zealand Dollar / US Dollar Coming under .6640 would negate the blow-off top scenario that I have discussed in recent days and also mean that channel support (since March) has been broken.
New Zealand / US Dollar Coming under .6640 would negate the blow-off top scenario that I have discussed in recent days and also mean that channel support (since March) has been broken.
A blow-off top looks likely and potential topping areas are .7250 (61.8% extension of .4890-.6601/.6193) and .7507 (78.6% retracement of decline from .8219).