If price is king, then volume is the queen that is able to heavily influenced the direction of price. Analyzing volume is important because volume often point us to huge moves in a stock before it happens.
Here are some reasons why you should look at a stock's volume:
In the next few articles in this chapter, we will delve deeper into volume and its effects on stocks. Below is a sample to give you a taste of how unusual volume can move a stock and the market.
In the chart above, you can see how CBS suddenly had a very unusual volume during one week. This volume was higher than normal. The volume was about 9X more than the usual trading volume!
This hinted of huge selling by some interested parties and smart money. Not long after that, the stock dropped. About a year later, the stock lost almost 40% of its value.
In the chart above, you can see how an unusual volume formed on the daily chart of SPY. SPY is the etf of S&P 500. There was a very large bullish bar on heavy volume which hinted of aggressive buying by market participants. The stock market had a huge bull run in the next 3 months.
That's the power of volume analysis!
Mar 22, 19 12:01 PM
So a friend asked me if Dayang will continue to go up. I guess many are wondering the same question as well. So let's take a look at what the charts are saying.
Mar 22, 19 12:00 PM
Analisa dan cerita menarik yang mengenai saham saham di Bursa Malaysia serta saham panas dan saham yang anda perlu pay attention.
Mar 22, 19 11:51 AM
Apple is one of those stocks that we should look at almost every day. The reasons is because it is a component of the Dow Jones, the S&P 500 and the Nasdaq Composite. If Apple does well, it will be go…
Mar 22, 19 11:40 AM
Analysis of what is going on in US stock market as well as highlights of some stocks that are forming significant patterns.
Mar 22, 19 06:40 AM
Learn the importance of stock charts and why you need to use them. Stock charts are footprints of market participants and they reveal quite a lot of information.