medium · Volume Price Analysis support-resistance
A stock is trading at $54.00, which is the 'Value Area Low' (VAL) on its VAP histogram. The current candle is a 'Hammer' with an ultra-long lower wick and 2.8× average tick volume.
What trade management step should the practitioner take?
- Short the breakdown now, since high volume appearing at the VAL suggests a major collapse is imminent.
- Exit any existing long positions right now, since the POC will likely act as a firm resistance ceiling soon.
- Wait patiently for the price to close firmly above the 'Value Area High' level before committing to any brand new entry.
- Enter long with a stop below the hammer's wick, targeting the 'Point of Control' (POC) as the next logical magnet.
Sign up free to see the explanation and track your rank →
More Volume Price Analysis support-resistance practice
- During an accumulation phase, the price dips below the estab… — What is the correct Wyckof
- What is the immediate trade implication?
- Following an accumulation phase, the market pushes below the… — What is this schematic eve
- A Volume at Price (VAP) histogram shows a large 'High Volume… — As the price approaches th
- What is the most likely outcome?
- If the price is at $158.00 and forms a shooting star on low volume, what is the expected o
- During a sideways consolidation, the price dips below the es… — What is the correct VPA te
- What is the Wyckoffian term for the first candle?