What does capitulation mean in stock market?

Capitulation is another word for panic selling, or liquidating a position in a security for a loss as it declines in price for fear of additional loss. Capitulation refers to a panicked selloff period—either in a particular stock, an industry, or the market at large. What Does Capitulation Mean in Simple Terms? What Is Market Capitulation?

What are the signs of a capitulation?

They try to anticipate the surest sign of a capitulation: the rebound in price that follows once the panic selling has run its course. Capitulation happens when a significant proportion of investors succumbs to fear and sells over a short period of time, causing the price of a security or a market to drop sharply amid high trading volume.

When does capitulation take place?

As per many traders and financial experts, capitulation takes place when the stock prices are in the bottom, and when this happens, it gets feasible for purchasing stocks. This is because the selling of stocks in big volumes results in price fall, and the buying in huge volumes results in increasing the prices.

What does it mean to capitulate?

In the financial world, capitulation means giving up on a security or even an entire market following a period of price declines, and selling, or liquidating a position, at a loss. Investors capitulate when they fear they could suffer even worse losses in the near future.