medium · Volume Spread Analysis effort-vs-result-spread
A stock breaks below a long-term trend support line on a wide-spread bar with volume 2.8× average. However, the bar closes in the upper 20% of its range.
What does this 'Effort versus Result' analysis suggest?
- The high volume contained massive professional buying (Absorption), and the breakdown is likely a 'Shake-Out'.
- The trend line is broken, and the surge in volume confirms a fresh mark-down phase has now begun.
- The 'No Selling Pressure' signal is confirmed here, since price ultimately failed to hold below the trend line.
- The market is entering a 'Mushroom Top' rounding phase, where this volume spike marks the final stage of distribution.
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