medium · Volume Price Analysis testing
A Spring candle forms with a narrow body and a very long lower wick. The volume is high, but the following candle is a wide-spread down candle that breaks the Spring's low on even higher volume.
What does this sequence signify?
- This is Stopping Volume that has finally come to a halt, and it will now lead directly to an immediate, sharp short squeeze.
- The insiders are merely 'testing' the Spring here, and the high volume on this candle proves they are still buying heavily and with conviction.
- This forms a 'Double Spring' pattern, which is considered twice as bullish as a single Spring because an even greater number of sellers were trapped.
- A failed Spring and a transition into a price waterfall, indicating the accumulation phase was unsuccessful and lower prices are coming.
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