Next we will look at another indication of weakness, the “No Demand Bar”.

According to trade Guider/ tom Williams an Ideal No demand bar is a Upbar bar with narrow spread closing in the middle or lower and the volume is less than the volume of the previous bars. Though this is their basic definition I have seen subtle difference in the No Demand bar throwing up different commentaries.

But in general any narrow spread low volume Upbar closing in the lower half of the bar indicates No demand.

What does this No Demand Bar indicate?

A No Demand bar indicates that there is no support from the SM. The SM is not interested in higher prices and they are not supporting the stock. Whatever buying or selling is from the stray weak money entering and exiting.

Consequently this indicates weakness. The No Demand bar does not indicate any immediate reversal. While analyzing a No demand bar we have to look at the prevailing background.

Does the background reflect weakness in terms of Upthrust or Pseudo upthrust? If the background is weakness the No Demand bar indicates enhanced weakness.

If the background does not show weakness the No demand bar does show weakness and does not necessarily Indicate reversal. It only shows lack of participation from SM. We may soon see the SM moving in to take the stock up further. So it would be wait and watch time.

Weakness Indications:

We will explore a little more on weakness indications. Upbars with high volume with narrow spread and closing in the middle or low indicates that supply is swamping the demand. This kind of bars would normally be seen near resistance lines. This by itself does not portend great weakness. But the following bars would indicate whether the supply is persisting or not. Persisting supply would definitely reinforce weakness. Enclosing the chart of L&T for the recent times when supply came in at the resistance line. The next bar shows that supply has decreased which encouraged the SM to push further. But the move faltered at the next level.