medium · Volume Price Analysis
A stock is rising on high volume, but the most recent daily candle is a 'Hanging Man' with a long lower wick and a small body at the very top of the trend.
Why is this considered a signal of weakening Demand?
- The narrow body indicates that insiders have completely withdrawn their liquidity to bait sellers into a trap.
- The long lower wick shows that supply flooded the market during the session, and even though price recovered, the balance has shifted.
- The high volume proves that buyers are in complete control and will easily push the price through the next resistance level.
- The long lower wick is a hammer shape, which is always a bullish signal of strong demand regardless of location.
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