Price action trading focuses on raw price movements without indicators. Volume confirms moves — a price rise on high volume is more reliable than on thin volume. Patterns like flags and head-and-shoulders predict future moves.
Answer: The rally may be weakening. Rising price + falling volume = weakening conviction. The rally lacks the broad participation needed to sustain itself.
Answer: A brief consolidation before the trend continues. A flag is a brief consolidation (the "flag") after a sharp move (the "pole") — typically the trend resumes after.
Answer: Bearish reversal signal. Head-and-shoulders (peak, higher peak, lower peak) is one of the most reliable bearish reversal patterns.
Answer: The support level connecting the two troughs. The neckline connects the lows between the shoulders — breaking it confirms the reversal and signals sellers in control.
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