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What Is Absorption Failure?

Sachin Yadav

What happens when apparent absorption doesn't hold?

Suppose NQ repeatedly tests a resistance level. Buyers execute aggressively, but price initially struggles to move higher.

A trader might interpret this as sell-side absorption.

Then, suddenly, buyers consume the available liquidity and price breaks through the level.

This is a reminder that absorption is not permanent.

The opposing liquidity may be exhausted, cancelled, or insufficient to stop continued buying.

Instead of treating absorption as an automatic reversal signal, I want to observe whether the level actually holds.

If price breaks through and sustains the move, the original bearish interpretation needs to be reconsidered.

Good order flow analysis includes the possibility that your first interpretation is wrong.

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