medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
In a sideways market, a 'Spring' appears (low-volume dip below support with a high close). Instead of a breakout, the price remains sluggish and produces another low-volume dip two days later that closes on its low.
What does this lack of response signify?
- This is a 'Double Spring' which is twice as bullish as a single 'Spring'.
- The second dip is a 'Test' of the first 'Spring', confirming the breakout is imminent.
- The professionals are 'Bag Holding' and deliberately keeping the price low to accumulate more shares.
- The 'Spring' did not generate enough momentum to clear the range, and the subsequent low close suggests supply is still present or demand is withdrawn.
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