medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
A stock rallies 10% over five days. On the sixth day, it rallies another 2% but on volume that is 50% lower than the average of the previous five days.
What is the effort/result read?
- The rally is losing momentum as the 'effort' to push higher has decreased significantly.
- The rally is becoming more efficient because it requires less volume to move the price.
- The low volume shows that there is 'no supply' left to stop the stock.
- The trend is confirmed because the price is still making new highs.
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