medium · Volume Price Analysis
A trader observes a narrow-spread up-candle on high volume followed by a 'Shooting Star' at the same resistance level.
How should this two-bar sequence be classified?
- A bullish 're-accumulation' signal, suggesting the market is resting before a major breakout.
- A 'no supply' test, indicating that the path of least resistance is to the upside.
- A 'gap-fill' maneuver designed to clear out short sellers before the markup resumes.
- A two-candle confirmation of distribution, where absorption is followed by an explicit rejection of higher prices.
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