An interesting VPA lesson on the daily chart for ABBV and a stock I was trading with options, but have since closed the position. The initial move lower was bearish, with rising volume. But then note the next section of price action, with the price continuing lower, but on falling volume, and a signal the move is weakening as the selling pressure drains away.
The buying then appears over the final two candles in the move. Note the narrow spreads and high volume signalling buying which then propels the stock higher and into a V-shaped rally. Unusual, but they do happen, and the stock was given further impetus with the release of quarterly results on the 7th February, which a further solid rise yesterday on excellent volume and bursting through the technical resistance in the $91 to $92 per share region. So more to come from this stock over the next quarter.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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