medium · Volume Spread Analysis wyckoff-phases-schematics
A stock gaps up $3.00 on a positive earnings report after a long rally. By the end of the day, the stock has traded on ultra-high volume but closed near its daily low with a narrow spread.
How should this scenario be diagnosed?
- Professional support, since market-makers are marking prices up against real demand.
- A strong gap-up that bypasses old resistance while pressing into new high ground.
- A weak gap-up where professionals are distributing into 'fear of missing out' buying.
- A lack of selling pressure, since the ultra-high volume was purely driven by good news.
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