medium · Volume Price Analysis validation
An equity instrument has been in a sustained bullish trend. A new candle forms with a spread that is only 25% of the 20-bar average, yet the volume is 2.5 times the average.
How should a practitioner interpret this specific footprint?
- This represents a successful test of supply within the existing markup phase.
- The trend is being validated as the high volume confirms strong conviction.
- A 'No Demand' bar has formed, suggesting the insiders have completely withdrawn.
- Institutional distribution is occurring through the absorption of buying pressure.
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