Jack Schwager covers spikes in his book, Technical Analysis.
A Spike High is identified by:
- a High sharply above the days on either side,
- a Close near the day's Low, and
- a strong preceding rally.
The more extreme each of these conditions are, the greater the likelihood of a reversal.
A Spike Low has:
- a Low sharply below the days on either side,
- a Close near the Day's High
- and must be preceded by a strong decline.