medium · Volume Price Analysis support-resistance
A stock in a distribution phase prints a candle that pushes above resistance by $0.80 but closes back below the resistance level, leaving a deep upper wick. Volume is 2.3x the average.
What is the Trade Plan implication?
- Enter long now, since the breakout above resistance has been tested and held.
- Prepare a short entry below the candle's low, as this is a high-volume Upthrust.
- Avoid trading entirely, as the elevated volume just reflects excess retail participation.
- Wait patiently for a genuine low-volume test of the newly formed support at the wick's high.
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