This pattern occurs when a stock rises very quickly out of
a base and gets overextended. Stocks in a Parabolic Move can
double or triple in value in a very short period of time (usually
less than two weeks). As an investor you certainly don't want
to be one of the last passengers on the train and get quickly
thrown off. Some examples of this pattern are shown below.

Notice the quick move upward in MCOM back in July. In 5 trading
days it went from $20 to $57 for a gain of 185%. Also notice
that on the biggest volume day (point A) that it gapped up
strongly to $53 and then closed poorly around $41. This was
the Climax Top Off the Parabolic Move. As an investor you
should have sold this day if you had bought the stock in the
$20's. Meanwhile you certainly should have not bought this
stock this day. Notice how the stock eventually pulled all
the way back to $20 by early August (point B).

Another example of a Climax Top Off a Parabolic Move is demonstrated
by LWIN. This stock skyrocketed from $30 to $95 in 10 trading
days for a whopping gain of 217%. The Climax Top occurred
on the 10th and 11th days of trading as the volume peaked
(point A). The stock then sold off and retreated back quickly
to around $42 by late November.

As you can see stocks that go up very quickly, in a Parabolic
Move, can also come down just as fast. My advice is if you
buy a stock and it doubles or triples in value in a very short
period of time (1 to 2 weeks) take your profits and congratulate
yourself for a job well done. If you become greedy then you
could lose most of your gains as the above examples indicate.
Furthermore if your buying a stock in this type of move be
very careful and watch out for the Climax Top if the stock
is trading on its biggest volume day.

Regards,

Bob Kleyla
Amateur-Investors.Com
http://amateur-investors.com