Most traders and investors get very frustrated with consolidation phases of price action on a chart, but as VPA students, we know these zones are the spawning ground of trends. One such example can be found on the daily chart for Meta (formerly Facebook), which has risen over 60% YTD. This turnaround in fortune has been driven in part by strong retail inflows at the beginning, but the groundwork was laid in December, as we can see on the daily chart.
The charts in this post are from my TradingView account, and we can see immediately the accumulation during this timescale with the accumulation and distribution indicator (blue hatched) thickening as the phase developed, confirming it would provide a strong platform of support for any move higher. Note also the yellow pivots in the consolidation, which helped to define the highs and lows.
On the weekly chart, we can see the vpa lessons and how the outermost support line of the volume point of control provided the springboard for the move higher for Meta. The stock is now at a significant point in its journey higher, and if it manages to close above the vpoc and resistance in this timeframe, there is no reason why it cannot regain $226 and after that $240 – as shown on the volume point of control.
By Anna Coulling – creator of volume price analysis
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