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Price and volume Play important Role in Analysis.

Wednesday, February 18, 2009 | Labels: , | |

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PRICE/VOLUME ANALYSIS


* In the stock market, volume is generated when there's a transaction between a buyer and a seller, i.e. when a trade is "done".

* Volume analysis is based on the principle of the balance of supply and demand.

* The movement and trend analysis of volume comprises 2 main factors:-
Time (how it moves previously and how much time it takes to trend) and
Size (how big the movement is).

* The volume analysis reflects the shifting of the supply/demand balance either to the:-
Demand (Buy side and is pushing the share price upwards); if there are more buyers than sellers, the share price goes UP.

Supply (Sell side and is pushing the share price downwards); if there are more sellers than buyers, the share price goes DOWN.

* Every stock's volume "signature" is analyzed and captured to predict its future movement.

* The volume signature is then combined with its Price Movement analysis to generate Buy/Sell signals.

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