medium · Volume Price Analysis climactic
A stock reaches a target resistance level and forms two 'Shooting Star' candles. The first has 1.5× average volume; the second has 2.8× average volume.
What is the most logical trade management action?
- Hold for a breakout, since the rising volume on the second candle shows buyers remain persistent and in control.
- Wait for a bullish hammer candle to form before treating the distribution as fully complete.
- Move the stop to break-even only, since the market is currently sitting in a low-volume 'No Demand' phase.
- Exit long positions or enter short, as the rising volume on rejection candles confirms a selling climax.
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