medium · Volume Spread Analysis effort-vs-result-spread
A practitioner identifies a 'Spring' in an accumulation range. The price dips below the range low of 42.00 to40.50 and closes at $41.80.
Which volume characteristic would most strongly confirm this as a high-probability buy signal?
- Ultra-high volume on the penetration, showing that a massive transfer of stock took place at the lower price level.
- Volume exactly equal to the 20-period average, signifying a healthy balance between buyers and sellers.
- Low volume on the penetration, indicating that the professionals marked the price down with minimal selling resistance from the herd.
- Increasing volume on the recovery back into the range, proving that demand is chasing the price higher.
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