medium · Volume Spread Analysis effort-vs-result-spread
A stock that has been rallying for several months suddenly produces a wide-spread up-bar on volume that is 3.5× the 20-day average, but the price closes in the middle of the bar's range.
What does this 'effort versus result' mismatch most likely indicate?
- Professional supply is entering the market and capping the price advance.
- The market is experiencing a brief pause before a secondary, stronger mark-up phase.
- The market-makers are marking prices up aggressively to reflect high demand.
- A lack of professional interest is causing the spread to narrow relative to the volume.
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