medium · Volume Spread Analysis background-trend-context
During a distribution phase, an up-thrust appears at the top of the range. The reaction to the up-thrust is a down-bar on ultra-high volume that breaks through the bottom of the range.
How does this volume confirm the phase shift?
- The volume represents 'bag holding' as professionals support the price at the bottom of the range.
- The high volume on the breakdown shows selling pressure and the start of the mark-down phase.
- The high volume indicates a 'selling climax' is occurring at the support level.
- The breakout on high volume is likely a 'shake-out' to remove weak shorts before a rally.
Sign up free to see the explanation and track your rank →
More Volume Spread Analysis background-trend-context practice
- Why is the 'Background' (previous activity) considered the most important factor when read
- A stock chart shows a 'low-volume test' at $38.50. The pract… — By shorting at this point
- A practitioner sees an 'up-thrust' (wide spread up, close on… — What does this 'negative r
- Historical data shows that indices can make new highs long a… — Why does this 'Market Rota
- What is the resulting Background Score, and what does it imply for a potential long trade?
- Suppose a stock is approaching a known resistance level. It… — How should a practitioner v
- After a period of distribution, the market attempts to rally… — What does this indicate?
- Does the current high-volume down-bar still represent a professional Shakeout?