medium · Volume Price Analysis testing
A trader sees a breakout candle above resistance with a wide spread and high volume. Two candles later, an Upthrust appears on even higher volume.
What is the most likely scenario for the initial breakout?
- The market is experiencing very high volatility yet still remains within a firmly bullish markup phase.
- The initial breakout genuinely started a strong new trend, and the Upthrust is simply a minor pullback move.
- The initial breakout was a 'trap up' designed to bring in momentum buyers before the insiders fully distributed.
- The insiders are merely 'testing the breakout' with this move to confirm that no meaningful sellers remain left in the market.
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