medium · Volume Price Analysis climactic

Following a prolonged price waterfall, a stock prints three consecutive candles with narrowing bodies and progressively deeper lower wicks on rising, above-average volume.

How should a practitioner interpret this sequence?

  1. This is a trap down move designed to lure buyers into what is actually still a falling market.
  2. The trend is accelerating downward simply because volume is increasing from bar to bar.
  3. This is stopping volume, indicating insiders are beginning to absorb the selling pressure.
  4. This is a selling climax, indicating that insiders are dumping the last of their inventory here.

Sign up free to see the explanation and track your rank →

More Volume Price Analysis climactic practice

KomFi: Test Prep Made Easy

KomFi: Test Prep Made Easy — free adaptive practice for GMAT, GRE, SAT, ACT, National Real Estate Exam, Investment Banking, and finance with full explanations.

KomFi Academy is free GMAT prep and personalized GMAT help built as a training platform: 92,240+ practice questions, 30,500+ flashcards, on-demand video lectures, podcasts, and 4K slide decks. Flagship tracks: Free GMAT Prep, Free GMAT Resources, National Real Estate Exam Prep, Investment Banking Prep, Finance Prep, GRE, SAT, ACT, LSAT, MCAT, Financial Accounting, Private Equity, Private Credit, and Quantitative Finance.

Free GMAT Prep & Personalized GMAT Help

What's inside

Topics

View pricing · Read testimonials