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

A stock is rising. You observe three consecutive bars: (1) Wide-spread up on high volume closing high; (2) Narrower spread up on ultra-high volume closing mid; (3) Narrow spread up on very low volume closing low.

What is the narrative?

  1. A healthy mark-up that is entering a 're-accumulation' phase to absorb profit-taking.
  2. A 'Buying Climax' that has been successfully 'tested' and is now ready for a breakout.
  3. Professional operators are 'marking up' on low volume to encourage the public to buy more.
  4. Strength (Effort) followed by Supply Entering (Effort with no Result) followed by No Demand (Professional withdrawal).

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