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Decreasing volume as a pattern develops is a characteristic of each of the following except

A) Bullish trend
B) Bearish trend
C) Sideways trend
D) Trend reversal

1 Answer

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Final answer:

Decreasing volume as a pattern develops is typically associated with bullish, bearish, and sideways trends, but not necessarily with a trend reversal. A trend reversal can have variable volume patterns, often an increase as the market sentiment shifts.

Step-by-step explanation:

Decreasing volume as a pattern develops is a characteristic of each of the following except a Trend Reversal. In a bullish trend, you would typically see volume increase as prices rise, signaling strong buyer interest. Conversely, a bearish trend might also display increasing volume initially as prices fall, indicating strong selling pressure. A sideways trend, which indicates a period of consolidation or indecision in the market, might also show decreasing volume as traders await news or events to guide future price action. However, a trend reversal does not necessarily display a pattern of decreasing volume. Volume patterns during trend reversals can vary; an increase in volume is often expected as new buyers or sellers enter the market to move prices in the opposite direction.

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