Wide-ranging days have a true range that is far larger than the days on either side and are especially meaningful after a strong trend. Jack Schwager (Technical Analysis) uses the Volatility Ratio to identify wide-ranging days.
- After a sharp down-trend, a wide-ranging day with a strong close is a signal that the trend will reverse.
- After a strong advance, a wide-ranging day with a weak close signals a downside reversal.
Extreme wide ranging days often precede a major trend reversal.