UiPath ($PATH), Wyckoff accumulation, and Volume Price Analysis.

UiPath ($PATH), Wyckoff accumulation, and Volume Price Analysis.

In financial markets, price movement is merely an effect. The true cause behind any significant market move is volume. When traders stare at a chart, they often focus entirely on price action and their favourite indicators.  However, by ignoring volume, they miss the footprints of the largest market participants: the insiders, institutional whales, and market makers.

Recently, an excellent VPA observation and question emerged from an X follower regarding the daily chart of UiPath Inc. ($PATH). The stock exhibited a massive surge in trading volume while hitting its daily 200-period moving average (200MA), followed by an aggressive, immediate pullback. The follower asked a brilliant question: Are these ‘sumo’ candles, and are we witnessing a structural accumulation phase?

The short answer is yes to both, and a further question not asked, but which is also relevant and explained below.

By applying the principles of Volume Price Analysis (VPA)—a methodology rooted in classical Wyckoffian market mechanics—we can strip away the noise. Let’s dissect exactly what happened on the $PATH daily chart, uncover the insider tactics playing out at the 200MA, and zoom out to the monthly chart to expose a textbook, multi-year, quiet Wyckoff accumulation campaign.

The Daily Chart: Dissecting ‘Sumo’ Candles at the 200MA

On the daily chart of $PATH, two distinct sessions stood out on the 20th and 21st of July. The price drifted up toward the heavily watched daily 200MA, accompanied by an absolute explosion in trading volume. Yet, despite this massive surge in trading activity, the actual price spreads remained narrow. Moreover, the candles closed well off their highs, leaving prominent upper wicks behind.

In Volume Price Analysis, we call these ‘sumo’ candles.

A sumo candle represents a localised battle of titanic proportions. Imagine an immense amount of effort being exerted, but the object itself barely moves. – much like trying to take on a Sumo wrestler. This is the Wyckoff Law of Effort vs. Result in its purest form:

• • The Effort:        Extraordinary trading volume (massive institutional orders shifting hands).
  • The Result:       A narrow price spread and an upper wick (failure to break out or sustain higher prices).

When you see massive volume coupled with a narrow spread and upper wicks, VPA tells us that the market has run directly into a wall of supply. The buying pressure, largely driven by excited retail traders, was completely absorbed by institutional sellers. The upper wicks provided an immediate, real-time clue that a near-term pullback was inevitable.

Insider Tactics: The 200MA Liquidity Sweep and Stop-Hunting Sandbox

To understand why this happened precisely at the 200MA, we have to look at the psychological mechanics of the market. The 200-period moving average is arguably one of the most widely tracked technical indicators on Wall Street. Retail traders, algorithmic bots, and casual investors view a clean break above the 200MA as the ultimate confirmation of a macro trend reversal from bearish to bullish.

Because of this universal visibility, the 200MA acts as a giant retail magnet.

As the price of $PATH approached the 200MA, retail traders got incredibly excited. They began aggressively placing buy orders to catch the anticipated breakout. Naturally, as they entered these long positions, they placed their defensive stop-loss orders in the region immediately below the breakout point or just beneath the recent swing lows.

This surge in retail excitement provides the perfect environment for institutional insiders and market makers to execute a liquidity sweep (also known as a stop-hunting exercise).

[Retail Breakout Buyers Rush In] —> Create a Massive Pool of Buy Orders
|
v
[Insiders / Market Makers] ———> Absorb Buy Orders to Fill Short Hedges
(Creates High Volume / Narrow Spread)
|
v
[Price Contained & Forced Lower] ————> Triggers Retail Stops (Liquidity Captured)

Insiders require massive liquidity to fill or hedge large positions without driving the price wildly against themselves. The flood of retail buy orders at the 200MA provided that exact counterparty liquidity. The insiders absorbed the buying momentum, capped the price, and then allowed—or engineered—the price to flush downward. This quick flush hunts the newly placed retail stops, forcing weak hands to sell back their shares at a loss, which the insiders can then re-absorb at lower prices.

Pullback vs. Reversal: Reading the Volume on the Decline

Following the sumo candles and the subsequent rejection at the 200MA, $PATH experienced an immediate downward correction. For many retail traders, this drop creates panic, leading them to believe the stock is entirely broken and headed for new lows.

However, VPA allows us to remain calm by analysing the volume profile of the decline. On the very first down candle of the pullback, the volume was notably weak. This is a glaring VPA anomaly. If a price decline is a true, structural reversal driven by aggressive institutional distribution, the volume must expand as insiders aggressively dump shares into the market. A price drop on low volume means there is no real selling pressure behind the move.

The second down candle printed on even lower, falling volume. This consecutive drop in volume completely confirms the VPA thesis: the downward move is entirely hollow. It is a temporary, tactical pullback designed to shake out weak-handed retail longs rather than a structural market reversal.

At the time of writing, $PATH has cleared the daily 200MA on good volume, validating the breakout and is now also looking to break and hold above the strong resistance at $13. However, to give us a broader perspective on what is happening, we need to look at what is happening on the monthly chart.

The Monthly Chart: Exposing the ‘Quiet Accumulation’ Campaign

To uncover the true structural intent behind any stock or instrument, we must transition from lower timeframes to the macro view. Zooming out to the monthly chart of $PATH completely unmasks the larger institutional footprint.

The first thing to note is that $PATH is a classic example of a post-hype IPO cycle. The stock went public amidst massive fanfare, peaking at an all-time high of nearly $90 in May 2021. What followed was a brutal, multi-year markdown phase as early investors distributed shares, eventually crashing the price down to a macro floor of roughly $10 in November 2022.

Since late 2022, the stock has been ‘bumping along’ this $10 level, grinding sideways for years. To the untrained eye, this chart looks incredibly boring, dead, and unappealing. To a Wyckoffian/VPA  trader, this is the most exciting phase of the market cycle: a structural accumulation base.

The definitive proof arrived in July, when the monthly volume printed a staggering 1.83 billion shares traded.

Think about that figure from a VPA perspective. Almost two billion shares changed hands in a single month, yet the monthly price candle barely moved, closing with a tight spread right at that historic $10 floor. This is the ultimate hallmark of ‘quiet’ accumulation.

Wyckoff Law of Effort vs. Result (Monthly View):
Effort: 1.83 Billion Shares Traded (July) ===> Result: Near-Zero Price Movement
Conclusion: Insiders are absorbing 100% of available supply at the $10 floor.

Insiders are aggressively and systematically buying massive blocks of shares under a strict structural ceiling. They intentionally do not chase the price higher because doing so would increase their average entry cost. Instead, they use dark pools, algorithmic iceberg orders, and localised flushes (like the daily 200MA trap) to absorb every single share available at or near $10. They are methodically transferring ownership of the company from public ‘weak hands’ to institutional ‘strong hands.’

The IPO Life Cycle: Transferring from Weak Hands to Strong Hands

One question I am often asked is whether this prolonged sideways grind is normal. And the answer is yes, this gruelling, multi-year bottoming process is highly typical of high-flying, post-hype IPOs, although not all stocks take this long to recover. For example, META took 14 months, while Tesla only took 155 days. I have done a post on SpaceX, which is facing the first major “lock-up release on the 6th August, whereby early investors can now sell their stock, which may lead to a further dump. This potential release is equivalent to 900 million shares. Elon Musk’s own shares are locked in until June 2027. See my post: SpaceX Heading Into Earnings

When a hot company first hits the public market, it is heavily marketed, overvalued, and over-allocated to retail investors at the absolute peak of the cycle (Distribution). Once the initial hype dies and the reality of the market sets in, the stock undergoes a severe markdown.

However, institutions cannot simply buy millions of shares the moment a stock hits a bottom. If they aggressively bought all at once, the lack of liquidity would drive the price up exponentially, ruining their positioning.

Therefore, the Wyckoff/VPA method dictates that a lengthy, exhausting, and boring accumulation base is required. The purpose of this phase is psychological warfare. By keeping the stock flat with occasional bouts of volatility suggesting a break higher for years, remaining retail investors become frustrated, lose hope, and eventually sell their shares just to deploy capital elsewhere. The insiders gladly buy those shares, building an immense structural position over time.

Looking Forward: Key Resistance Levels to Watch

So, where do we go from here? For that, we must consider Wyckoff’s second law of Cause and Effect, which states that the size of a future market move is directly proportional to the duration and volume of its accumulation base. $PATH has been building a massive ’cause’ since late 2022, punctuated by July’s historic 1.83 billion share intake. The potential ‘effect’ will be substantial.

However, patience is required. Before a massive mark-up phase can begin, the stock must systematically break through its overhead structural supply zones: 

The Daily 200MA: Now taken out. The $13 region, which it is testing at the time of writing, and then the $14 region where we need to see a high-volume breakout followed by a low-volume test (similar to the price action on the daily 200 ma).  The $13 & $14 ceilings become support, confirming the daily supply has cleared.

These are the macro overhead resistance zones (as shown on the monthly chart). A clean close above $14 will signal the ‘quiet accumulation’ is drawing to a close and the ‘mark-up’ phase is officially underway. For those of you who have read my book and know the story of Uncle Joe and his widgets – the warehouse has been replenished, and it’s time for the cycle to begin once again. 

However, until these structural levels break, the insiders will continue their quiet campaign—buying the dips, sweeping liquidity, and trapping impatient breakout traders at major moving averages. As volume price analysts, our job isn’t to guess when they will push the button, but to align and move in lockstep alongside their unmistakable footprints.

What are your thoughts on $PATH’s massive monthly volume spike? Are you tracking any other busted IPOs?

By Anna Coulling – creator of volume price analysis

David and I offer one-to-one coaching in the VPA methodology, and you can find all the details here: One to One Coaching Program 

By Anna Coulling – creator of volume price analysis