medium · Volume Profile Analysis profile-shapes
During an equity session, price forms a P-shaped profile. Late in the session, the market rotates down from the top of the belly toward the thin lower tail. A volume profile analyst notes that the area from the session low to where the belly begins is an extremely low-volume zone.
What is the standard interpretation of this low-volume zone in the tail?
- The low-volume tail is a High Volume Node (HVN) and should act as strong support
- The low-volume tail is identical in implication to the high-volume belly and should be treated the same way
- The low-volume tail is a Low Volume Node (LVN) or 'air pocket' — price is likely to travel through it quickly if revisited
- The low-volume tail means the session was illiquid overall and the entire profile is unreliable
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