hard · Volume Spread Analysis
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.
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