medium · Volume Spread Analysis wyckoff-phases-schematics

A stock has been in an accumulation range between $40 and $45. The index begins a sharp 'Mark-Down'. The stock dips to $39.50 on very low volume and quickly returns to $42. This is an example of:

1. A 'failed test,' since the price penetrated below the prior support level on the dip.
2. A 'Buying Climax,' because the rapid recovery signals a rush of eager retail buyers.
3. A 'Spring' or 'Shake-out' that uses index-wide panic to flush out the last weak holders.
4. Relative weakness, since the stock made a fresh new low while the broader index was falling too.

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