medium · Volume Spread Analysis climaxes-tests-springs-upthrusts
A stock has been in a steady decline. Suddenly, a bar appears with a spread of $2.50 (relative spread = 2.1) and volume that is 3 times the average. The close is near the high. The next day, the price moves slightly higher.
What VSA signal has occurred?
- A Shake-out, designed to trap short sellers before a massive downward continuation.
- Falling Pressure, showing that professionals have withdrawn their support.
- A Selling Climax, suggesting that the bear market has officially ended for the long term.
- Stopping Volume, indicating that professional buying has arrested the decline.
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