medium · Volume Spread Analysis wyckoff-phases-schematics
A stock has been accumulated. A wide-spread up-bar occurs on high volume, closing on the high, breaking out of the range. The practitioner labels this a 'Sign of Strength'.
What is the most important 'future expectation' for this bar?
- The practitioner should place a fixed profit target at exactly twice the height of the accumulation range and disregard later signals.
- The market must respond immediately with continued upward movement or a low-volume test; failure to follow through would indicate supply is present.
- Volume must continue increasing on every single subsequent bar, including down-days and reactions, or the developing trend cannot be considered healthy.
- The stock will immediately retrace all the way back to the exact middle of the accumulation range, letting professional operators accumulate more shares cheaply.
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