medium · Volume Price Analysis validation
Following a breakout from a distribution zone, the price pulls back to the old floor of support (now resistance). It forms a shooting star with volume 70% below average.
What does this indicate?
- A 'fakeout' where the market is preparing to return to the previous range.
- A lack of institutional conviction that will lead to sideways price action.
- The start of a new accumulation phase at the previous distribution floor.
- A successful test of demand confirming the markdown will proceed.
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