easy · Volume Spread Analysis background-trend-context
Suppose a stock is approaching a known resistance level. It gaps over the resistance on high volume and continues to rise.
How should a practitioner view this gap?
- As a signal that the market is about to enter a period of 'No Demand'.
- As a 'Trap Up-Move' designed to suck in late buyers at the top.
- As a sign of strength designed to prevent 'locked-in' traders from selling at breakeven.
- As a sign that market-makers are desperate to sell their stock.
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