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

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