medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
A stock is falling faster than its parent index. On a Tuesday, it produces a wide-spread down-bar on average volume closing on its lows. On Wednesday, the spread narrows, volume doubles to ultra-high levels, but the price closes in the top 10% of the bar.
What is the most likely diagnosis?
- A failed test has occurred at the lows.
- The stock is in a 'no demand' phase.
- Absorption volume is appearing on Wednesday.
- The stock is showing selling pressure that will lead to a collapse.
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