easy · Volume Spread Analysis effort-vs-result-spread

A stock resists an index-wide decline, trading sideways while the parent index drops 5%.

What does this 'Relative Strength' suggest?

  1. Professional accumulation is occurring, as they are buying the stock on every dip.
  2. The stock is simply 'lagging' and will eventually fall twice as far as the index.
  3. The market-makers are trying to 'hide' the distribution by keeping the price high.
  4. There is a total absence of buyers and sellers, leaving the price stagnant.

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