medium · Volume Spread Analysis effort-vs-result-spread
In a trending market, you notice that as the price approaches the upper supply line of the trend channel, volume decreases significantly and the spread narrows.
What is the most likely outcome?
- The market is entering a Selling Climax at the top of the range
- The price will gap up cleanly through the resistance line
- The trend channel will widen sharply as volatility increases further
- The price will fail to penetrate the line and will likely pull back
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