hard · Volume Spread Analysis effort-vs-result-spread
An index has been rallying for several months and reaches an old trading range from the previous year. On the first day of contact with this zone, a wide-spread up-bar appears on ultra-high volume, but the price closes in the lower third of its range.
What does this price action primarily indicate regarding professional sentiment?
- The high volume confirms strong buying pressure that will likely lead to an immediate breakout.
- A narrow-spread bar would be required to confirm that supply is actually present in this area.
- Supply is entering the market as professionals use the rally to distribute into retail demand.
- The market is showing absorption volume as professionals buy through the old resistance levels.
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