medium · Volume Profile Analysis profile-shapes
A stock trading at 150.25 breaks above a multi-day consolidation with the composite profile POC at 148.80. The breakout session closes at 151.10, forming a P-shaped profile with the POC at 150.60 and almost no volume below 149.50. The following session gaps up to 151.50 and quickly adds volume between 151.00 and 152.00.
In volume profile terms, what has occurred to the prior consolidation zone's LVN between 149.50 and the new value?
- The LVN sitting between 149.50 and the freshly built value area has now been fully converted into a thick, sticky high-volume HVN by that single breakout session
- The LVN will automatically and reliably become the next session's developing POC the very moment that price returns to it and trades there again briefly
- The LVN is rendered completely irrelevant for analysis the instant a new and higher value area has been firmly established above it on the profile
- The LVN remains; if price revisits the 149.50-150.60 zone in a future session, it should travel through rapidly on its way to the composite POC near 148.80
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