medium · Volume Price Analysis wyckoff-laws
A stock is rising on high volume, but the most recent daily candle is a 'Hanging Man' with a long lower wick and a small body at the very top of the trend.
Why is this considered a signal of weakening Demand?
- The narrow body shows insiders have entirely withdrawn their liquidity from this session to bait unsuspecting sellers into a trap.
- The long lower wick shows that supply flooded the market during the session, and even though price recovered, the balance has shifted.
- The high volume proves buyers remain in firm control of the session and will easily push price straight through the next resistance level.
- The long lower wick forms a classic hammer shape, which is always considered a bullish signal of strong demand no matter where it appears on a chart.
Sign up free to see the explanation and track your rank →
More Volume Price Analysis wyckoff-laws practice
- What is the confidence level for a short entry?
- Which phase of the Wyckoff cycle follows 'Accumulation' and is confirmed by a high-volume
- What does the volume on the rallies indicate?
- What is the Wyckoff interpretation?
- A trader is analyzing a potential 'Triple Top'. Peak 1: high… — What does this progression
- Why do markets typically fall faster than they rise, and how is this reflected in the VPA
- A stock has declined from 80 to 60. At 60, you see a series… — What is the 'Cause' in this
- If a currency pair consolidates in a 150-pip range for 8 weeks on a daily chart, what is t