Volume Shock refers to a sudden and significant spike in a security's trading volume compared to its historical average, often preceding or accompanying a sharp price movement. An unexpected surge in volume can signal informed trading, major news events, block deals, or the beginning of a new price trend. Technical analysts use volume shocks as a confirmation signal—a price breakout accompanied by a volume shock is considered more reliable and sustainable than one that occurs on thin volume. Tools like the Volume Weighted Average Price (VWAP) help contextualise volume shocks.
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