StockSignal
Low-Volume Bounce
Story type: Diagnostic
Price momentum looks positive, but volume patterns raise questions. Price momentum has turned up while volume trend is declining and volume-price confirmation is weak. The bounce may lack the buying conviction needed to sustain.
State
Apparent technical bounce with structural weak volume
Emergence
Price appears to be bouncing but volume doesn't confirm. When price momentum turns positive but volume trend is declining and volume-price confirmation is absent, the apparent recovery may lack conviction. Sustainable moves typically occur on increasing volume; moves on declining volume often fail.
Limits
This story identifies structural discrepancy, not bounce failure prediction. It does not claim the bounce will fail, predict volume patterns, or assess whether this time is different. Some recoveries do begin on low volume.
Explanation
This diagnostic clarifies a common misreading: Surface reading: A price bounce suggests buyers are stepping in. Structural reality: Price Momentum is positive—the price is rising. However, Volume Trend is declining—fewer shares are trading. Volume-Price Confirmation is weak— volume is not expanding to support the price move. The combination reveals that apparent buying interest may be shallow. Sustainable rallies typically feature expanding volume; bounces on thin volume often lack the conviction to persist.
Interpretation
This story identifies structural discrepancy between price appearance and volume reality. It does not claim the bounce will fail, predict price direction, or assess market microstructure. It clarifies that volume context matters for price moves.
Required Signals
volume-price-trend
Average volume on positive-close days divided by negative-close days