Effort without Result

One last indication before we take up strengths is called “Effort without Result

After accumulation phase is over the SM gets ready for the Mark Up Phase. In order to move the stock up the SM has to put in some effort. The effort to move the market up can be seen as wide spread upbars closing near the top with increased volume. The volume would never be excessive. It is easy to identify these bars.

If the “effort to move up” results in the stock moving up, the effort has yield the desired result. Many times you will find an effort to move up bar and the next bar would be high volume bar closing near the low indicating large supply coming in swamping the demand. So the effort to move up has not yielded the desired result. Frequently you would find such a situations at high resistance / high supply areas.

These Efforts without result are good indications of weakness. Most of the times you will find the stock moving down or side ways after this failure. This is because the SM would rather wait for the supply to vanish before repeating the effort. The SM will then test the market for supply before trying to move up further. The repeat move could be good entry points.

Actually though the VSA does not take into account the OPEN, I have noticed that an ideal “Effort to Move up” bar would open near the low and close up near to high. This is a deviation I have taken from the general VSA concept in my analysis.