medium · Volume Spread Analysis wyckoff-phases-schematics
A stock is rounding over in a 'mushroom top' pattern. You observe several up-bars with narrow spreads and volume that is lower than the previous two bars.
What does this indicate?
- The market is consolidating before a major breakout to new all-time highs, confirmed by no supply.
- This is absorption volume where the professionals are quietly buying up every single small rally that develops.
- The market is exhausted of buyers, and professional operators are no longer supporting the rally attempts.
- Sellers have completely left the market, creating a low-volume vacuum that will inevitably pull prices much higher.
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