What a Jump in Selling Climaxes Could Suggest

More than one-quarter of the optionable stocks we track achieved a selling climax last week, led by energy

by Karee Venema

Published on Aug 31, 2015 at 11:03 AM

According to Schaeffer's Quantitative Analyst Chris Prybal, roughly 935 optionable stocks achieved a selling climax during last week's volatile price action -- or 25.3% of the tickers we study. This is the most since Oct. 7, 2011, when 1,003 stocks -- or 29.3% of all tickers studied -- recorded a selling climax, which translated into a bullish signal, as you can see by the S&P 500 Index (SPX) price action below. 

150831sellingclimax1

As a quick refresher, a selling climax is occurs when a stock hits a 52-week low in intraweek action, only to reverse course and finish above the previous week's closing price. As Prybal explained recently, an influx of selling climaxes can sometimes be viewed in a contrarian light.

Drilling down on specific sectors, energy had a whopping 193 selling climaxes last week -- which coincided with a big bounce in oil. Information technology and industrials, meanwhile, rounded out the top three.

150831Climax2


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