Tuesday, 20 September 2016

Price and volume health check

Those who use volume as part of the technical studies will say the wish to see a rising market where volume is greater on the upswing that that on the down swing.

A very good demonstration of this is shown by the readtheticker.com NetVolume indicator, if volume is healthy during a rising market then the NetVolume will rise with the trend, if it is not then other forces are at work.

Also divergence is between price and the NetVolume indicator add value, if you have a fall in the market and the NetVolume indicator does not show an equal swing down, then the divergence must be bullish and the swing down can be considered a light volume sell off.

The NetVolume indicator is a price and volume trend ‘health check’, it is not a market timing tool, or an oversold or over brought indicator.

In the chart below the (Symbol: SSRI) NetVolume indicator gave an early warning signal that a turn was near, on reviewing other gold and silver stocks with the NetVolume indicator and apply Wyckoff logic it was clear accumulation was present and higher prices could be expected in the future. The rest is history.


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