medium · Volume Price Analysis validation
A stock breaks above a three-week resistance level of $52.00 with a wide-spread up candle closing at $53.50. However, the volume for this candle is only 40% of the twenty-day average.
How should a practitioner interpret this move?
- The move represents a successful test of supply.
- The market is showing absorption of selling pressure at the ceiling.
- This is a validated bullish breakout indicating a new markup phase.
- The move is a manufactured trap up move by insiders.
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