medium · Volume Spread Analysis wyckoff-phases-schematics
A stock has been in a steady decline for three weeks. Suddenly, a wide-spread down-bar appears with RV > 2.50 (ultra-high volume) and CP > 85% (close near the high).
According to the practitioner's checklist for going long, what is the most appropriate next step?
- Wait for the parent index to make a new low to ensure the stock is at a maximum discount.
- Wait for a secondary signal, such as a low-volume test or a shake-out, to confirm accumulation.
- Short the stock because ultra-high volume on a down-bar confirms aggressive selling pressure.
- Enter a long position immediately on the close of the bar to catch the exact bottom.
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