medium · Volume Profile Analysis reference-levels-migration
In a multi-week composite volume profile on a stock trading around 95.00, a trader identifies the Value Area from 90.00 to 98.00 with the POC at 93.50. The stock has been within this range for three weeks.
If price breaks out above 98.00 and the NEXT session opens at 99.50 (outside the composite VA) and holds above 98.00 for the first two periods, what is the volume-profile read?
- The breakout is likely a fakeout because composite POC at 93.50 will pull price back
- The two-period acceptance above the composite VAH confirms upside breakout and suggests the 80% rule may apply in reverse if price re-enters the value area from above
- Composite profiles are not valid for breakout analysis — only daily profiles matter
- Price must return to the composite POC at 93.50 before the breakout can be confirmed
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