Use Accumulation-Distribution analysis

Price could return to the top of the test prior resistance several times. This can create a variety of stepping or basing ranges before trend finally moves sharply upward. Other times, stocks will immediately go vertical when printing new highs. The challenge is to decide which outcome is more likely.

Use Accumulation-Distribution analysis to predict whether new highs will escalate immediately or just mark time. Price either leads or lags accumulation. When the stock reaches new heights without sufficient ownership or buying pressure, they will often pause to allow these forces to catch up. Other times, accumulation builds stronger than price. The initial thrust to new highs confirms this accumulation. Breakout triggers a new round of buying interest and price immediately take off without basing phase.