hard · Volume Spread Analysis
In a sideways accumulation range, a stock has already shown stopping volume and several successful tests. Today, it gaps down below the support line on moderate volume but recovers within the session to close on its absolute high.
What structural event has occurred?
- The recovery on moderate volume indicates a trap up-move designed to lure in buyers before a final collapse.
- The move is a failed test of the lows, suggesting that supply is still present and the range will continue.
- A shake-out has occurred to flush out the remaining weak holders before the mark-up begins.
- A genuine breakdown is in progress because the support level was breached on the open.
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