medium · Volume Price Analysis
After a strong three-week advance, a futures contract prints three consecutive candles with rising volume. Each candle features a progressively narrower body and an increasingly long upper wick.
How should a practitioner interpret this sequence?
- This is topping out volume, signaling that the advance is losing momentum as insiders sell into the demand.
- This is a validated bullish trend, as rising volume confirms the continuing strength of this move.
- This is a series of successful tests of demand, suggesting the path higher is now clear of sellers.
- This represents a classic short squeeze, where forced buying from trapped bears drives the sudden volume spike.
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