easy · Volume Spread Analysis effort-vs-result-spread
A stock breaks out above old resistance at $42 on wide spreads and high volume. It then pulls back to $42.10 on volume that is lower than the prior two bars.
What is the practitioner's term for this pullback and its significance?
- A Test of Breakout, confirming that old resistance has become support and the trend remains strong.
- The start of a Mushroom Top, a slow rounding-over showing eroded professional support.
- A Hidden Upthrust, suggesting the breakout spike was a manufactured trap luring in late buyers.
- Supply Overcoming Demand, indicating the breakout has failed and sellers have regained firm control of price.
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