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Manjushri Sharma SEBI RA

16th Sep · SEBI Registration INH000019497

How Absorption Candles Helps to Make right Entry

Any stock for ex

ABSLAMC
Absorption Candles occ ur when significant buying or selling activity is met by sufficient opposing orders to prevent price from continuing in the expected direction. The candle may show heavy activity or a long wick, yet price fails to make meaningful progress beyond an important level. For example, repeated attempts to move below support may attract aggressive selling, but if buyers absorb that selling pressure, price may repeatedly recover and close away from the lows. Similarly, heavy buying near resistance can be absorbed by sellers, preventing further upside movement. Absorption is therefore about the relationship between effort and result: substantial trading activity produces relatively limited price progress. Volume can provide useful confirmation, particularly when unusually high volume occurs near an important support or resistance zone. However, volume alone does not prove absorption. Traders should examine subsequent candles to determine whether the opposing side actually gains control. A successful breakout after absorption can invalidate the initial interpretation, while a rejection followed by a structural reversal can strengthen the absorption thesis.

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