hard · Volume Profile Analysis reference-levels-migration
Price approaches a Naked POC from three sessions ago in an equity index future. The session volume at that level builds quickly, and the bar that touches the Naked POC prints a long upper wick with the close near the lower third of its range on above-average total volume. The Naked POC is now tested.
What is the volume profile interpretation?
- The Naked POC has been resolved and confirmed as support because price transacted there with heavy volume
- The Naked POC remains naked because a high-volume rejection bar does not count as a valid test
- The long upper wick means the level is still unresolved and will require a second test before the auction is complete
- The Naked POC has been resolved and the above-average volume with a rejected close near the low of the bar signals responsive selling, shifting the structural bias toward the bearish side now that the open auction is closed
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