easy · Volume Price Analysis
A practitioner identifies a 'Hanging Man' candle at the peak of a three-month bullish trend. The candle has a long lower wick and the volume is 3.0× the average.
What is the correct interpretation of this signal?
- It represents a 'Test of Supply' to ensure no sellers remain before the next leg higher.
- It is a neutral validation signal showing that the 'effort' of buyers matched the 'result' of the close.
- It is a sign of strength, similar to a hammer, indicating that buyers have successfully defended the level.
- It is a sign of weakness because significant selling pressure appeared in a rising market for the first time.
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