medium · Volume Spread Analysis background-trend-context
A stock has been trending upward for six weeks. You observe a wide-spread up-bar that closes in the middle of its range on ultra-high volume, exceeding 2.5 × the 20-day average. The following bar is a narrow-spread down-bar on low volume.
What is the most likely professional activity occurring on the ultra-high volume bar?
- Professional absorption of remaining supply
- Institutional buying following the trend
- A healthy test of the current demand
- Supply entering the market to cap the move
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