Capitulation definition

Capitulation is term used in technical analysis and in analysing market psychology. Capitulation is one indicator that is used to establish the bottom. "Market capitulated" or "stock capitulated" means that most of the potential sellers already sold.

Say ABCD stock has been declining for a long time, but there are still many holders who are not selling and hoping for a turnaround. Then say some bad news comes out, ABCD stock goes down even more on much stronger than usual volume. Some people would call that Capitulation; the idea being that all potential sellers now sold, and the stock can now start going up without the burden of potential sellers.

Investor Dictionary

A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z