hard · Volume Price Analysis
After a strong markup, price drifts back on three successive down-bars whose volume reads average, then average-minus, then well-below-average, reaching a prior congestion floor where a narrow-spread bar closes mid-range on the lowest volume of the entire pullback. A Coulling-trained analyst calls this a successful test of supply and expects continuation higher.
What is the single most important confirmation the analyst still requires before treating the test as validated?
- The very next bar must close up on volume that rises above the low-volume test bar, confirming buyers stepped in once supply was shown absent
- The test bar itself must print the widest spread of the pullback so the low volume is unambiguous against a large price range
- A second test must occur at a lower price on even lower volume before any upward continuation can be trusted
- Volume on the test bar must exceed the average of the three preceding down-bars to prove demand absorbed the offered supply
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