easy · Volume Spread Analysis background-trend-context
A stock is observed on a weekly chart exhibiting a clear Selling Climax with ultra-high volume 10 periods ago. On the current daily bar, the price probes into the lower boundary of that climax on a narrow spread and low volume, closing in the upper third of the bar.
What does this sequence signify to a practitioner?
- A sign of weakness indicating a lack of demand.
- A successful test of supply confirming professional absorption.
- A secondary distribution phase starting at the lows.
- A breakdown through support suggesting further mark-down.
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