hard · Volume Price Analysis vpa-core
A stock is in a strong uptrend. During a routine pullback, one down-closing bar prints with a narrow spread and volume barely a third of the 20-day average, well below every other bar in the pullback.
How should a VPA practitioner interpret this specific down bar?
- As a No Demand bar, since any narrow-spread, low-volume bar always signals the same warning regardless of its close direction.
- As a No Supply bar — narrow range and thin volume on a down close show sellers have little interest, favoring resumption.
- As a Selling Climax, because the sharpest volume contraction of the pullback always marks the point of maximum insider distribution.
- As an Upthrust, since a quiet down bar inside an established uptrend always represents a failed test of the prior highs.
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