Value Area Low (VAL)

Value area low is the bottom of the prices where most of the volume traded. Below VAL, the market is trading cheaper than the recent bulk of business. That can be a sale that gets accepted, the start of a markdown, or a liquidation probe that buyers take back into the value area. As with VAH, acceptance is time and volume, not a wick. VAL is the mirror of VAH and is only as meaningful as the profile window you chose.

An open below the prior session's VAL puts the new day in a weak location relative to yesterday's trade. The question is unchanged: does price stay out, or does it return inside? Inside a larger balance, VAL is the lower edge participants recently defended by trading a great deal just above it. A break of a composite VAL is a more significant event than a break of one quiet session's VAL.

A dip below VAL that fails, with price re-entering the value area and holding, is the bullish rejection. It is a range-edge long. It is not a reason to buy every break of VAL in a downtrend, where lower value is the trend. Look at the migration of the POC. If value is stepping down, failed dips are less reliable.

Acceptance below VAL, volume building under yesterday's value, is the bearish read. Bounces into VAL from below are then tests of the broken edge. If they fail, the old value area is acting as resistance. If they reclaim the value area, the breakdown was a probe.

Buying "because it is under value" with no sign the auction is rejecting the lower prices. Cheap relative to yesterday can get cheaper. Also using VAL from a profile that barely traded, where 70 percent of almost nothing is not a level.

The expansion algorithm differs by platform, so two VAL lines on the same data can disagree by a bin or two. And VAL does not include who was long or short. A low-volume node just under VAL can accelerate a break. That is a separate feature of the profile, not part of the VAL number itself.