medium · Volume Spread Analysis effort-vs-result-spread
An index has broken through its lower trend channel line on wide spreads and high volume. It then rallies back to touch the line on very low volume.
What does this confirm?
- The trend channel line was drawn incorrectly.
- A Buying Climax is imminent.
- The breakdown was genuine, as there is 'no demand' on the rally back to the break-point.
- The breakdown was a shakeout, and the low volume shows sellers are gone.
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