hard · Volume Spread Analysis supply-demand-smart-money

A stock has an average daily volume of 2.0 million shares. Today, the stock advances 3% into new high ground on volume of 6.5 million shares, closing on its high. The next day, the stock is flat on 1.5 million shares.

How does the practitioner evaluate the 6.5 million share bar?

  1. It is a sign of 'Excessive Volume' which likely contains hidden professional selling.
  2. It is a 'Successful Test' of the upside potential.
  3. It is a 'Bullish Mark-up' bar that confirms institutional accumulation has completed.
  4. It is 'Stopping Volume' indicating that the rally has been arrested.

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