easy · Volume Spread Analysis supply-demand-smart-money
A stock has been rising for three months. It then gaps up to new highs on excellent news, but the day's spread is narrow and the volume is ultra-high (3.0 × average).
What is the professional diagnosis?
- A 'Weak Gap-Up' where professionals are distributing into retail euphoria.
- An 'Absorption Gap' meant to clear out the remaining locked-in traders
- A 'Shake-out' designed to trigger the stops of short sellers in the market
- A 'Strong Gap-Up' confirming an ongoing continuation of the current bullish mark-up trend
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