dimpy.handa
Dimpy Handa
Traditional approach if Price increases along with higher volume then (+)ve or Price decreases along with higher volume then (-)ve.
It was the era of OBV,in the sixties.(On Balance Volume)
Joseph Granville, creator of the On Balance Volume indicator, insisted on the importance of volume analysis. He exclaims that volume precedes price, and he even goes so far as to argue that volume is cause and price is effect.
Then traders made few more observations on Volume :=
a)Traders must always look at price patterns in conjunction with their associated volume pattern, never alone. A stock may appear to be in a head and shoulders pattern, but the volume pattern must confirm that analysis.
b)Careful analysis of the volume of selling that occurred above current resistance will help you estimate how long a stock will stall at that level.
c)Well-above-normal volume is essential when separating a true from a false breakout above resistance.
d)Well-above-normal volume on the break of a key support level is likely to keep the swing trader from making the mistake of shorting into a deceptive "spring" formation.
e)Climactic volume can occur after a sustained downtrend. The retest of the support level of the selling climax can provide a good trading opportunity if it is accompanied by low volume (as compared to the selling climax).
It was the era of OBV,in the sixties.(On Balance Volume)
Joseph Granville, creator of the On Balance Volume indicator, insisted on the importance of volume analysis. He exclaims that volume precedes price, and he even goes so far as to argue that volume is cause and price is effect.
Then traders made few more observations on Volume :=
a)Traders must always look at price patterns in conjunction with their associated volume pattern, never alone. A stock may appear to be in a head and shoulders pattern, but the volume pattern must confirm that analysis.
b)Careful analysis of the volume of selling that occurred above current resistance will help you estimate how long a stock will stall at that level.
c)Well-above-normal volume is essential when separating a true from a false breakout above resistance.
d)Well-above-normal volume on the break of a key support level is likely to keep the swing trader from making the mistake of shorting into a deceptive "spring" formation.
e)Climactic volume can occur after a sustained downtrend. The retest of the support level of the selling climax can provide a good trading opportunity if it is accompanied by low volume (as compared to the selling climax).