medium · Volume Spread Analysis effort-vs-result-spread
During a market decline, a stock produces a down-bar on a narrow spread with volume significantly lower than the prior few bars. It closes in the middle of its range.
What does this 'No Selling Pressure' bar indicate?
- This is a sign of extreme weakness simply because the price failed to close higher that session.
- This is an up-thrust pattern specifically engineered to trap eager breakout traders into a losing long position.
- Professionals are not participating in the decline, suggesting the path of least resistance may soon turn up.
- The narrow spread here shows that trapped buyers want out but are simply unable to exit their existing long positions.
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