Absorption
Volume Price Analysis glossary · Volume Price Analysis
Definition
The action of insiders consuming aggressive opposite-side orders without letting price move — visible as high volume + narrow spread + minimal close advance.
Absorption in plain English
Imagine a fire hose blasting water at a brick wall, and the wall doesn't budge — that's absorption. Lots of sellers are aggressively dumping shares (the fire hose), yet the price barely drops (the wall holds), because big, patient buyers ("insiders") are quietly soaking up every share thrown at them. You spot it as a bar with huge volume (tons of trading) but a narrow spread (the price traveled only a small distance) and a close that barely moves. The takeaway: someone strong is quietly buying everything on offer, which often comes right before price is allowed to rise.
Learn these first
Practice Absorption
Related Volume Price Analysis terms
Volume Price Analysis practice questions · Volume Price Analysis flashcards · Volume Price Analysis study guide