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Why Study Volume
(Indicators based on the "advances" and "declines" concept)
Description: Advance decline indicator,
analysis, volume, advances, decline, technical analysis, trading, advances,
declines, charts, price, quotes, trend.
MarketVolume® is a leader in the volume based technical analysis.
Volume is one of the most important aspects in analysis of price trends.
Respectfully, volume of advancing and declining issues delivers
important information about activity in the groups of advancing and
declining stocks. This information could be used to analyze indexes and
predict possible future trend development. You may read the complete "Volume
Analysis" article and access volume and advance/decline real-time
quotes and charts on the MarketVolume's website. Below you may see a few
quotes from this article.
"... the proper analysis of an index's
past volume action allows analysts to anticipate its likely future trends...
...A period of trading usually initiated by a volume surge
that is sufficient to stop and reverse an ongoing trend within the near
future. This volume surge is indicative of a pronounced change in market
sentiment and marks the critical point from where on the market is in danger
of becoming 'overbought'...
...The duration of a distribution phase is extended enough
to allow a sufficient number of high-priced shares to change hands from one group of mid-term
traders to another.... This transfer of shares
brings the market to the point where it becomes 'overbought' in the
mid-term...
... The distribution phase is also prolonged enough to allow
market sentiment changes to take place.... A sentiment shift takes place for the mid-term players involved: some
are glad they sold, while they were in a profit zone, others who recently
bought in are starting to realize that their timing was off and are now
confronted with mounting losses....
...The advance/decline volume ratio can be used to determine the
point at which an up-trend starts to lose momentum, as a large number of
high-priced shares are switching hands ...
... the advance/decline volume ratio can also pinpoint the time when a
large number of low-priced shares are being transferred from one group of
investors to another....
Depending on the value
of the AD volume ratio, you can make assumptions about how long and how strong a
coming a trend reversal might be..."
A. v. S.
V. K.
Copyright 2004 Highlight Investments Group.
All rights reserved. This material may not be published,
broadcast, rewritten, or redistributed.
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