hard · Volume Price Analysis Climactic Price Action & Reversal Dynamics
Two stocks each stage a sharp multi-week decline. Stock A's final down candle has ultra-high volume, a wide spread, and closes at its low with no wick. Stock B's final down candle also has ultra-high volume and a wide spread, but closes with a lower wick covering most of the range.
Which stock more likely marks a genuine low, and why?
- Stock A, because a close on the low under record volume shows sellers are fully in control at the extreme.
- Stock B, because the large lower wick under record volume shows buying absorbed the decline before the close.
- Both equally, since ultra-high volume alone is sufficient evidence of a climax regardless of where the candle closes.
- Neither, since a genuine low requires several closes above the opening price before any conclusion can be drawn.
Sign up free to see the explanation and track your rank →
More Volume Price Analysis Climactic Price Action & Reversal Dynamics practice
- Why is Candle A the stronger candidate for a genuine Buying Climax bottom compared to Cand
- An index has been trending down for months. Volume on down c… — What does this three-week
- What does the second wide-spread down candle most likely reveal about the first?
- Near the top of a rally, a stock prints a wide-spread up can… — What does this second cand
- What does the sharply diminished volume behind the marginal new high most likely reveal ab
- A stock gaps up sharply at the open after a long advance, tr… — Why does a flat close on r