Stopping Volume

Volume Spread Analysis Glossary

A wide-spread down-bar on very high or ultra-high volume, closing at or near the high (or at least in the upper half), with the next bar level or up. It indicates that professional buying has absorbed a wave of panic selling, arresting an existing decline. Stopping volume does not mean the bottom is in—it means the decline has been halted; expect a period of sideways accumulation, and treat any subsequent low-volume test of the area as a strong buy signal. The analogy: a downhill skier turning sharply at the bottom of a run—the spectacular spray of snow (volume) brings him to a halt, but he is not yet going uphill.

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