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Continuation vs. Reversal

Sachin Yadav

The same footprint signal can support two different interpretations.

Imagine NQ is moving higher and aggressive buying appears near a new high.

One possibility is that buyers are driving a continuation move.

Another possibility is that buying is being absorbed and price is struggling to advance.

How do I distinguish between them?

I examine the result of the buying activity.

If price continues higher and holds above the breakout area, continuation may be developing.

If price repeatedly fails to advance and returns below the level, the reversal hypothesis becomes more interesting.

I don't want to predict the outcome from the footprint alone.

I want to identify the scenario that the market is actually confirming.

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