medium · Volume Price Analysis testing
A stock breaks below a congestion floor of 55.00 on Day 1 with high volume. Day 2: The price rallies to 56.20 but closes at 54.80 on 2.1× volume.
What does this 'failed test of demand' indicate?
- The price is in a true 'No Supply' phase and will drift sideways for weeks.
- The insiders must return to the zone to continue selling as buyers are still present.
- Institutional buying is absorbing the breakdown, signaling reversal is underway.
- The breakout was in fact a genuine spring, so price is likely to head toward $60.00 soon.
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