medium · Volume Spread Analysis background-trend-context
Compare two scenarios: (A) A stock gaps up to new highs on narrow spreads with high volume after a long rally; (B) A stock gaps up through an old trading range on wide spreads with high volume.
Which statement accurately differentiates professional intent?
- Scenario A is a successful 'Test of the Highs,' while Scenario B is a 'Buying Climax'.
- Scenario A shows institutional commitment, whereas Scenario B shows professional exhaustion.
- Scenario A is a 'Sucker Trap' for retail buyers, while Scenario B represents professional absorption of supply to prevent selling.
- Both scenarios are bullish because gapping always requires professional participation to maintain the price level.
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