hard · Volume Spread Analysis wyckoff-phases-schematics
A stock tops out after a strong uptrend, forming what appears to be a four-month distribution range complete with an Upthrust After Distribution and a Sign of Weakness that breaks range support on volume 2.1× average. Two weeks later, price rallies back above that broken support on volume 1.6× average, then continues higher, eventually exceeding the range's original high within a month.
Given this outcome, how should the initial breakdown most plausibly be reclassified in hindsight?
- The 'SOW' breakdown was most plausibly a Spring inside a larger re-accumulation range, since price reclaimed support on rising volume and then pushed on to fresh new highs.
- The breakdown remains a valid Sign of Weakness regardless of the later rally, since an SOW is defined solely by the breakdown bar's own volume and spread, not by what follows.
- The rally back above support and to new highs confirms the original UTAD was invalid, meaning the entire four-month range must be reclassified as a single Buying Climax.
- Because price ultimately exceeded the range's original high, the breakdown should be ignored as a data error, since genuine distribution can never be followed by new highs.
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