medium · 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 reflecting an ongoing lack of demand
- A successful test of supply confirming professional absorption.
- A secondary distribution phase quietly starting near the recent lows
- A breakdown through key chart support suggesting further mark-down is ahead
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