Good on ya for having a go Zandaya, and yes, test bars fall on the strength side of the ledger.
They (tests) are always either confirming signs if strength (confirming a previous more serious sign of strength), or continuing signs of strength (where in an uptrend there are often and regular little tests for any supply present).
Here's that chart again-
Firstly, remember that this stock has just broken out, and while in the accumulation zone previously, one or more groups saw enough (fundamental) value in the stock to begin the (sometimes long and slow) process of accumulating it.
There is a lot of time and money invested in completing an accumulation, and is not to be taken lightly.
(also- this stock isn't a micro cap pump and dump type of accumulation process either, it the real deal, and is a serious stock accumulation)
OK - Once an accumulation is considered complete & price successfully breaks out......(remember that sometimes it can take a few goes before the breakout is successful, this can be for a few reasons, perhaps some unexpected fresh new stock comes available and overwhelms the price, or more often, some sellers are waiting just above the creek and refuse to be shaken out when price pulls back - so effectively there is a decent block of stock for sale right above the breakout level which then needs to be absorbed (bought) before things can even get underway).....so anyway, the price then needs to be marked up (carried higher) so that eventually it can be either held with a tidy profit on their books, or completely or partially sold off at a higher level.
This stock appears to be just beginning the mark up phase, and the accumulators will be attempting to move the stock substantially higher, for the least cost possible.
They aren't going to spend excessive dollars to get the price up, they will almost want it to float up by itself, with only gentle pushes from themselves, although to get things going, right after the breakout to attract the traders and investors, they will often have to give it some decent pushes.
To do this in any reasonable stock, the accumulators will use any means available to them to get the market to buy the stock, and in turn lift the price higher.
If the stock is reasonably well known, the media services (TV, Internet and Print) are often the first port of call.
These services always need to fill space, and are always looking for stories (especially in the internet & print services - think AFR etc).
Tom Williams said may times that in the late 60's and early 70's (when he was involved to a Private Trading Syndicate), the journalists knew surprisingly little about the markets at all, and when they needed stories to fill space, they would print word for word almost any story typed out and provided to them.
Following that, the investor meetings are next (think 'Diggers and Dealers' or some type of expose' in the field the stock is operating in), and also during the Q & A, and during the 'meet and greet' following an AGM for the stock.
So spruiking the newly accumulated is an important part of the mark up phase, and this effort is put in so that the overall market generally carries the stock higher as much as possible, and when some selling pressure arrives at certain levels, and stock needs to be absorbed (bought), it will mostly be done (begrudgingly) at the lowest price possible without damaging the uptrend (too much).
OK, all that said - to set the scene for our stock- in box #1, we see price pushed up on very high volume, but then is not supported on the next two bars, where price is allowed to fall if that is what the market wants to do. What has gone on here is that after the big push on high volume, the market needs to find out how many fresh seller's (stale holders or buyers during the accumulation) this might have attracted. But from the low'ish volumes, especially by the third bar, showed that selling pressure seemed fairly low. So then the fourth bar pushed higher in response to the low selling pressure (and must have had to absorb some sellers as the volume needed to increase quite a bit, compared to the spread of the bar). but all was going well.
And the fifth bar sailed higher on less volume than the fourth, but spread was similar, showing the going was now pretty easy.
Then box #2 was mostly testing for supply (also consider that the overall market may have been having a bad week, which also offers the ideal time for testing). After a steep rise previously, breaking out above the creek, price dips lower repeatedly over numerous days, enticing weak holders to sell.
Also note that on the last bar in box #2, the volume is seriously low (selling pressure is almost non existent, as what was there may have actually been the accumulators selling a few to get price down in the first place).
In response to the low volume, Box #3 accelerates higher for two days, then on the third day closes poorly (near the low of the bar), on decent volume. This suggests that some reasonable supply may have been found. So immediately price comes back the next bar to see if the supply remains, but the lower volume suggests it doesn't. (perhaps some shorter term traders began selling, that created a short term domino effect on weak holders - who really knows.....)
But anyway, the last bar in the third box suggests that supply is not excessive, or ongoing (but that won't really be known until price opens again the next day)
(only four bars in this week, which must have contained a public holiday I guess)
And so in response to that fourth bar in box #3 which had lower volume, ---in box #4, we see price accelerate away again on high volume.
But the second bar appears to meet supply, closing low, on higher volume (than the previous bar).
In response the third bar attempts to test (the messy shape of the bar suggests retailers who were possibly getting over excited), and finds lower volume.
So the fourth bar accelerates higher again, but the mid bar close again suggests some selling pressure remains.
And the fifth bar sees price come off with quite high volume - selling pressure appears to have come in on this bar.
As can be seen, even though there were a few trials and tribulations, price was able to be lifted substantially over a month (and the day/short term/momentum
traders would have also been pretty happy I guess - hot copper would have been going nuts......haha), the close so far was 1.445 for anyone interested.
