Auditing volume-on-retest rules for prior highs and lows

The gap the reader flagged

A reader treated a published price-and-volume rule set as incomplete because it did not say how to read a later test of a prior high or low that occurs on rising volume. That later print is volume-on-retest: activity when price returns to the prior extreme, compared with activity at the original extreme.

The reader asked whether a retest on higher volume should be handled the same way as a retest on a volume decline of 3% or less. The unspecified increase path is the rising-volume-gap.

How the three-percent-volume-band was restated

The reply said the second rule had not been left out. It restated that a test of a prior high or low on a volume decline of 3% or less is taken to imply that the prior extreme will be exceeded. That reading is implied-exceedance.

The high-side example used 100,000 shares at the prior high and 97,000 shares at the retest. That pair was described as 3% less volume and treated as arguing that price should continue through that high.

A retest that printed the same 100,000 shares as the prior high, a 0% volume change, was still placed inside the 3% or smaller decrease bucket and still called supportive. The reply set 3% as the smallest contraction still counted as supportive, and equivalently said retest volume at 97% or more of the prior high is supportive.

The rising-volume-gap and low-side-symmetry

A retest at 110,000 shares against a 100,000-share prior high was described as an even more supportive volume condition than a flat or slightly lower print.

The same percentage comparisons were said to apply when the tested extreme is a prior low, not only a prior high. That claim is low-side-symmetry.

Why the rule stays unfinished

TradersWeek editorial reading: the reply answered a question about higher volume by restating the three-percent-volume-band and then ranking a 110,000-share print as even more supportive. That ranking still does not define the rising-volume-gap as its own decision case. A reader who asked whether an increase should be handled the same way as a decline of 3% or less was given the contraction rule again, plus an assertion that more volume is more supportive.

Until the increase path is specified, implied-exceedance at a prior high or low remains a partial hypothesis. Low-side-symmetry means the same unfinished path applies when the tested extreme is a prior low.