easy · Volume Spread Analysis wyckoff-phases-schematics
A stock breaks out of an accumulation range on a wide-spread up-bar with high volume. Three days later, the price pulls back to the top of the old range on narrow spreads and low volume, closing mid-bar.
What is this action called and what does it signify?
- A test of a breakout, signifying that old resistance has now become support.
- A buying climax, signifying that the breakout was a trap and a markdown is imminent.
- A shake-out, signifying that professionals are trying to trap short sellers before a crash.
- No demand, signifying that the uptrend has failed and the stock will return to the bottom of the range.
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