medium · Volume Price Analysis vpa-core
A stock gaps up sharply at the open on news, then spends the day grinding lower to close near its low on the day's highest volume, finishing below the prior day's close. In Coulling's framework, the most precise interpretation of this 'shooting star / gap-fade on volume' is that:
- Smart money used the gap and the public's news-buying as liquidity to distribute stock, leaving weak holders trapped at higher prices
- The gap was a genuine breakout and the heavy volume confirms strong continuation once the minor profit-taking ends
- Stopping volume appeared, halting the decline and setting up an immediate accumulation phase from the day's low
- The volume is irrelevant because gap days suspend volume-price analysis until the gap is fully filled
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