Coiled Market

AAA

DEFINITION of 'Coiled Market'

A market that is believed to have the potential to make a strong move in one direction after being pushed in the opposite direction. The idea is that if a market should be headed in one direction based on its fundamentals but is pushed in the other direction, it will eventually make a strong move in the original fundamental direction. This coiled move will often be more substantial than what might have been the case if it had gone in the expected direction to begin with.

INVESTOPEDIA EXPLAINS 'Coiled Market'

Coiled markets often arise when the market has been held down artificially. This happens in commodities markets, such as gold and silver. Investors looking to capitalize on coiled markets will use both fundamental and technical analysis to identify markets or specific equities that exhibit the characteristics of a coiled market.

The origins of this term relate to the physics of a coiled spring: the more it is compressed, the greater the rebound will be.

RELATED TERMS
  1. Whipsaw

    A condition where a security's price heads in one direction, ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  3. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Precious Metals

    A classification of metals that are considered to be rare and/or ...
  6. Reversal

    A change in the direction of a price trend. On a price chart, ...
Related Articles
  1. Trader's Corner: Finding The Magic Mix ...
    Options & Futures

    Trader's Corner: Finding The Magic Mix ...

  2. 8 Ways To Survive A Market Downturn
    Entrepreneurship

    8 Ways To Survive A Market Downturn

  3. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  4. Basics Of Technical Analysis
    Trading Strategies

    Basics Of Technical Analysis

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center