hard · Volume Spread Analysis climaxes-tests-springs-upthrusts
A stock trading near the top of a multi-week range prints an up-bar with a wide spread on volume double the recent average, but closes only at its midpoint. The next day's bar has an even narrower spread, closes near its low, and volume drops to the lowest reading of the past month.
What does the second bar most likely confirm about the wide-spread up-bar that preceded it?
- That it was a Successful Test, since low volume always signals accumulation
- That it was distribution, since no demand appears to absorb the overhang
- That it was a genuine Sign of Strength, followed by healthy consolidation
- That it was a Shake-Out, since sellers have now been flushed out
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