hard · Volume Spread Analysis effort-vs-result-spread
A stock has been rising steadily. It produces a wide-spread up-bar on ultra-high volume, but the next day's bar is a down-bar closing near its low.
What is the significance of this 'Effort to Rise Without Result'?
- It represents a temporary shake-out designed to clear the path for a vertical move higher.
- It indicates the 'Path of Least Resistance' is still upward, as the high volume confirms strong buyer commitment.
- The ultra-high volume on the up-bar contained more selling than buying, and the failure of the next bar confirms professional distribution.
- The market is testing the highs to ensure no sellers are left before initiating a final buying climax.
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