medium · Volume Price Analysis vpa-core
A practitioner is constructing a dynamic trend channel. The first rally pivot high occurs on high volume. The subsequent pullback to the first pivot low occurs on significantly declining volume.
What is the health status of the uptrend?
- The trend is unhealthy because falling volume on the pullback always signals a lack of buyer conviction.
- The trend is entering a 'Selling Climax' phase because the pullback volume is far too low to sustain the current advance.
- The trend is healthy because volume is rising on the advance and falling on the retreat, showing weak selling pressure.
- The trend is in a 'Public Participation' stage, and the trader should patiently wait for a confirmed 'No Demand' bar before entering.
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