medium · Volume Price Analysis
A stock breaks above resistance on high volume and then consolidates for five days. During this consolidation, the price touches the broken resistance level twice. Each touch occurs on progressively lower volume. This signifies:
- A distribution phase where insiders are slowly offloading their shares to the public.
- A 'decay' in selling pressure, confirming that the insiders have successfully cleared the path for higher prices.
- A 'Topping Out' sequence where volume must increase for the price to move higher.
- A lack of momentum, suggesting that the trend is about to fail and reverse back into the congestion zone.
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