easy · Volume Spread Analysis wyckoff-phases-schematics
A stock has just broken out of an accumulation zone. It pulls back to the breakout level on a narrow spread and very low volume (RV = 0.40), closing near its high. This 'Test of Breakout' indicates:
- Retail traders are rushing to buy the dip
- Institutional traders are distributing their positions
- Supply is exhausted and the breakout is confirmed
- The breakout was a 'sucker trap' and prices will collapse
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