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.
Sign up free to see the explanation and track your rank →
More Volume Spread Analysis wyckoff-phases-schematics practice
- A stock gaps up $3.00 on a positive earnings report after a… — How should this scenario be
- In the 'Mushroom Top' distribution pattern, why do prices round over gradually rather than
- During a distribution phase, how do professionals use 'Good News' to facilitate their stra
- Why is the '90-Minute Reporting Delay' on the London Stock Exchange significant for VSA pr
- In the Accumulation phase, why does volume typically remain low on rallies within the trad
- What is the diagnosis?
- A practitioner sees a high-volume up-bar with a narrow sprea… — Is this always a sign of w
- A stock gaps up from $78 to $81.50 following a positive earn… — How should a practitioner