easy · Volume Spread Analysis effort-vs-result-spread
A stock gaps down on bad news at the open. The volume is very high, but by the end of the day, the price has recovered to close near the high of the bar.
What is the most likely scenario?
- This is a shake-out where professionals used the bad news to buy stock from panicking retail holders.
- The volume is high because everyone is selling, confirming a new bear trend.
- Professionals are shorting the stock aggressively into the close.
- The bad news is genuine, and the recovery is a 'dead cat bounce' before a further crash.
Sign up free to see the explanation and track your rank →
More Volume Spread Analysis effort-vs-result-spread practice
- An equity averages a daily volume of 1,000,000 shares. Today… — How should this volume lev
- An equity is in a steady uptrend. Today, it produces an up-b… — What is the most likely pr
- What exactly is being 'Tested'?
- Which of the following describes 'Falling Pressure'? (SOW 3.7)
- During a market rally, a market-maker expects still higher p… — What does this indicate?
- A stock has been trading in a range between $40 and $45 for… — How would a practitioner ca
- A stock is rising on wide spreads and high volume. Suddenly… — What principle describes th
- An index has been rising steadily for three weeks. Today, th… — How should this activity b