medium · Volume Profile Analysis profile-shapes
A weekly composite profile in crude oil (CL) shows a well-developed single distribution with POC at 77.80 and a tight value area from 77.10 to 78.50. The following week, price opens at 79.20 (above the prior VAH), trades between 79.00 and 79.80 for three days, and begins developing a new POC at 79.45.
Which volume-profile observation best describes what is happening?
- The prior week's POC at 77.80 remains the controlling reference, and price is now statistically obligated to revert back downward into that established value area before the week concludes
- A second distribution is forming above the prior week's value area; if it solidifies, the composite view will show a split profile with the LVN around 78.50 to 79.00 as the imbalance zone
- The sustained price action above 79.00 should be read purely as a single-print profile tail and excess high, meaning it carries no informational weight and the trader should disregard it entirely
- The newly developing POC at 79.45 mechanically cancels and overwrites the prior week's old POC, leaving 79.45 as the single valid volume reference for the market going forward
Sign up free to see the explanation and track your rank →
More Volume Profile Analysis profile-shapes practice
- A session is trending higher. A consolidation forms mid-day… — What does this skew imply?
- The 'Rotation Factor' for an index session is calculated as… — What does this numerical re
- A trader observes the E-mini S&P 500 (ES) opening at 09:30 E… — What is the Initial Balanc
- After three consecutive D-shaped sessions building a tight v… — How should a volume profil
- During an equity session, price forms a P-shaped profile. La… — What is the standard inter
- After a prolonged uptrend, a P-shaped profile forms, but ins… — How should this two-sessio
- A session has a 'b-shape' profile. The price spent the first… — What was the likely partic
- In volume profile terms, what has occurred to the prior consolidation zone's LVN between 1