what is a low volume pullback 
a low volume pullback is a technical correction toward an area of support that occurs on lower than average volume since the move occurs on low volume traders often attribute the pullback to weak longs locking in profits rather than a reversal understanding low volume pullbacksfrequent moves that occur in the opposite direction of a trend which are accompanied by low volume are normal fluctuations and generally deemed to be insignificant on the other hand a large spike in volume in the opposite direction of the trend could be used to signal that the smart money is starting to look for the exits and the trend is getting ready to reverse these significant moves lower are known as high volume pullbacks trading low volume pullbacksmany technical traders will try to enter a position on the short term weakness seen in a low volume pullback because it increases the risk reward ratio as stop losses are closer to major support levels long term investors may also take these opportunities to add to their positions at a lower price and decrease the cost basis of their overall long positions which creates an opportunity for more upside traders will use indicators such as the on balance volume obv to find situations where the trend and the volume are diverging if the trend is moving higher and volume is decreasing trades may look for a potentially longer term reversal to occur since there are fewer longs responsible for pushing the stock higher high volume pullbacks are also a sign that the market may be ready to reverse in these instances long traders may exit their positions and long term investors may lock in some profits traders often look at many different factors when determining if a pullback is temporary or long term while volume is a reliable indicator it s also important to look at chart patterns such as key support and resistance levels and technical indicators like the relative strength index rsi or moving average convergence divergence macd to confirm these sentiments real world example of low volume pullbackshere s an example of a series of low volume pullbacks in the spdr s p 500 etf spy the chart shows three low volume pullbacks occurring within a significant uptrend before a high volume pullback that signaled a more prolonged reversal in price each low volume pullback was followed by a subsequent resumption of the overall trend as weak traders took profits off the table before more bullish investors entered the market by comparison the high volume pullback lasted for several days and the etf was considerably more volatile in the aftermath as investors questioned whether the long term trend was still in place investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal 