medium · Volume Price Analysis climactic
Following a sustained 6-month uptrend, a 'Hanging Man' candle forms on the daily chart with volume at 1.8 × the average. The next candle is a 'Shooting Star' on 2.1 × average volume.
What does this two-candle sequence confirm?
- The sequence is a 'bullish re-accumulation' setup, since the Hanging Man's lower wick still shows buyers stepping in with real support.
- The Shooting Star is an anomaly, since its heavier volume versus the Hanging Man actually signals a fresh trend continuation higher.
- The sequence confirms a 'Buying Climax' has occurred here, meaning accumulation is about to start soon.
- The sequence confirms the start of the distribution phase through two distinct signatures of weakness (from below and above).
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