medium · Volume Price Analysis support-resistance
A 'Failed Test of Supply' occurs when price is pushed back into an accumulation zone on high volume.
What does this indicate for the subsequent breakout attempt?
- The breakout attempt is cancelled entirely and the whole trend reverses to bearish
- The overall 'Cause and Effect' balance built in accumulation has now shifted to the downside
- The breakout is delayed as insiders must continue to absorb the residual selling pressure.
- The breakout is imminent because high volume on the test shows strong renewed buying interest returning
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