medium · Volume Price Analysis vpa-core
On a daily chart an instrument forms a textbook narrow-spread doji on ultra-low volume right at the top of a strong multi-week advance. Coulling would caution that, despite the bearish 'no demand at the top' temptation, this single bar is insufficient.
Which follow-through would BEST upgrade it to an actionable distribution signal in her framework?
- The very next bar gapping higher to a new high on expanding volume, since continuation on volume validates that the trend's demand remains intact and the doji was a pause
- A subsequent wide-spread down bar closing on its low on volume markedly higher than the doji, confirming that supply has now overwhelmed the stalled demand
- A series of progressively narrower up bars on shrinking volume drifting sideways, since contracting range proves accumulation is quietly underway beneath the surface
- An up bar of equal spread to the doji on identical low volume, since matching the prior bar confirms equilibrium and a stable continuation higher
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