medium · Volume Price Analysis testing
After an accumulation phase, a stock breaks out above resistance at $30.00. Two days later, a candle dips to $29.50 but closes at $30.10. The volume for this 'dip' candle is only 0.35x the 20-day average.
What is the trade implication?
- Failed breakout here; exit long positions
- Absorption signal; expect sideways drift
- Spring within the range; wait for higher volume to confirm
- Successful test of supply; path higher is clear
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