medium · Volume Price Analysis validation
A stock has risen steadily for ten days. On the eleventh day, it prints a narrow-spread up candle with the highest volume seen in the entire move.
How should a VPA practitioner interpret this?
- Insiders are absorbing buying pressure, indicating the trend is nearing exhaustion.
- A 'no supply' candle confirming that the support floor has now been raised.
- The trend is clearly accelerating as fresh institutional buyers rush into the market now.
- A genuinely successful test of demand confirming the current markup phase will keep continuing.
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