medium · Volume Spread Analysis wyckoff-phases-schematics
A stock that has been trending upward for several months suddenly plunges below a key support level on high volume, only to close back near the highs of the session.
If the price fails to rally and instead drifts lower over the next three days, how should a practitioner interpret the initial plunge?
- As a 'spring' maneuver that is trapping short sellers before a breakout.
- As a genuine mark-down phase triggered by distribution in the background.
- As a successful test of supply that requires more time to develop.
- As no-selling pressure because the close was near the highs of the bar.
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