Today has seen a significant volatility spike for Humbl inc, which has us on the lookout for a potential reversal in price, which so often accompanies extreme volume. Today’s volume is classified as extreme using a statistical filtering method of applying a 2.5 standard deviation threshold to a 20-period rolling average of volume (see figure 1).
Interestingly, the volatility spike coincided exactly with price testing the 261.8% Fibonacci extension of a prior upswing. This is providing support for the shares. The stock is currently in the mature stages of a dramatic decline which saw around a 75% cut in share price since late last month. Extreme volume following a significant fall like this may be warning of a potential selling climax, where the level of sellers in the market peaks and buyers finally have to start entering the market.
Volume exceeding the 2.5 standard deviation threshold typically coincides with a reversal of reasonable significance in price. With support coming from the Fibonacci extension corroborating the case for a bullish reversal, a rally from here may be considerable.