hard · Volume Price Analysis support-resistance
A stock tests the same resistance ceiling three times over six weeks. The first test hits resistance on volume 2.5x average, the second on 1.8x average, and the third on just 1.1x average — each test also failing to close above the prior test's high.
What does this pattern of three tests most likely indicate?
- Imminent breakout, since three tests of the same level always exhaust available supply and clear the way higher.
- Distribution exhaustion — declining volume and weakening highs on each test show buying power fading, favoring a breakdown.
- Accumulation nearing completion, because repeated tests of resistance on shrinking volume always precede a markup phase.
- A Spring in progress, since three failed pushes toward resistance mimic the multiple-test signature typically seen at range lows.
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