Consolidation VWAP's

The Consolidation VWAP's indicator identifies consolidation periods in a stock's advance and automatically anchors three distinct VWAPs to key points within that range. It helps traders visualize volume-weighted support and resistance levels formed during sideways price action to better anticipate potential breakouts or reversals.

Usage

The tool automatically detects when price moves sideways within a user-defined range after an uptrend. Once a consolidation is identified, the script draws a box around the area and begins calculating three Anchored VWAPs (AVWAP):

• VWAP Anchored to Consolidation High: Anchored at the highest price point within the consolidation. This helps identify resistance and the average price paid by buyers at the peak.
• VWAP Anchored to Consolidation Low: Anchored at the lowest price point, often serving as a primary support level for the base.
• VWAP Anchored to Highest Volume: Anchored to the specific bar within the consolidation that saw the most trading activity, highlighting the "Point of Control" for that period.

Traders can use these lines to identify entries on breakouts or to set stop-losses near the consolidation lows. The indicator also provides a table summarizing the current values of these VWAPs for quick reference.

Details

Unlike a standard daily VWAP, which resets every session, these Anchored VWAPs are event-based. They calculate the average price weighted by volume starting specifically from the structural milestones of a "base" or consolidation. The detection logic requires a prior uptrend and monitors "depth" (the percentage pullback from the high) to ensure the consolidation remains a constructive base rather than a deep correction.

Settings

Consolidation Settings

• Maximum Base Depth: The maximum percentage the price can drop from the consolidation high before the base is considered invalid.
• Minimum Base Length: The minimum number of bars required to qualify as a consolidation.
• Maximum Base Length: The limit for how long a consolidation can last; exceeding this resets the detection.
• Prior Uptrend Amount: The minimum price increase required before the script starts looking for a consolidation base.
• Show Consolidation Area: Toggles the background box representing the identified range.

VWAP Settings

• VWAP Source: The price source used for calculations (e.g., HL2, OHLC4).
• Base High/Low/Volume VWAP: Toggles for the individual anchored lines, including color and width customization.
• Show Previous VWAPs: When enabled, keeps past consolidation VWAPs on the chart rather than deleting them when a new one forms.

VWAP Values Table

• Show VWAP Values Table: Toggles a dashboard showing the exact price levels of the active VWAPs.
• Positioning: Adjusts the table's location on the chart.

FAQ

How do I use the Consolidation VWAP's?

Look for price to break out above the "Base High VWAP" or the consolidation box. These lines often act as support on retests after a successful breakout.

Can I change the sensitivity of the base detection?

Yes, by adjusting the "Maximum Base Depth" and "Minimum Base Length," you can tune the indicator to detect tighter "flat bases" or wider "cup-and-handle" style consolidations.

How do I access Consolidation VWAP's?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.