StockSignal
Support Level Test
Story type: Situational
Three signals describe a support test: support bounce indicators are active, volume confirms price behavior, and volatility provides context. Together these describe price at a technically significant level.
State
Support level test
Emergence
Price testing support with volume characteristics. When support level bounce indicators suggest price is at or near support, volume confirms price behavior, and volatility provides context, the stock is testing a technically significant level. This describes a support test situation with volume and volatility context.
Limits
This story identifies support test characteristics, not bounce prediction or entry timing. It does not predict whether support will hold, guarantee reversal, or indicate position sizing. Support levels can and do break, especially on high volume.
Explanation
Each signal represents an independent observation about the support test: Support Level Bounce measures whether price is at or near a level where it has previously found buying interest. Active indicators suggest price is testing known support. Volume-Price Confirmation measures whether volume behavior aligns with price action. This indicates whether the test has participation characteristics. Historical Volatility provides context for the test—whether it's occurring in a calm or volatile environment, which affects the significance of the level. When all three align at support, they describe a technically significant test—an observation about current position, not outcome prediction.
Interpretation
This story identifies support test characteristics, not bounce certainty. It does not predict whether support will hold, guarantee reversal, or indicate optimal action. Support levels break regularly, and each test weakens the level.
Required Signals
support-level-bounce
Price rejection and recovery at historical support levels
volume-price-trend
Average volume on positive-close days divided by negative-close days
historical-volatility
Annualized standard deviation of price returns over a 20-week window