hard · Volume Price Analysis climactic
In Anna Coulling's Volume Price Analysis, a daily chart shows price falling sharply over six sessions and then prints a single wide-spread session that closes near its high on volume 4.5 times the 20-day average. The next session opens near the previous close and trades in a tight range on below-average volume.
How does Coulling label the wide-spread session, and what does the low-volume tight-range session that follows confirm?
- The wide-spread session is a Selling Climax, a distribution top in Coulling's model; the quiet session that follows confirms sellers hold firm control and further downside is now the likely path.
- The wide-spread session is a Buying Climax (accumulation bottom); the quiet session confirms that the surge of professional buying has absorbed the available supply and selling pressure has dried up.
- The wide-spread session is only stopping volume, and under Coulling's strict rules it cannot be classified as a genuine climax until a later test session also closes near its high on renewed heavy volume.
- The wide-spread session is really a bear trap here; the tight-range session that follows is a no-demand bar, signaling the prevailing downtrend will resume again almost immediately in force.
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