Volume Spread Analysis
- Thread starter karthikmarar
- Start date
- Tags karthikmarar technical analysis volume volume spread analysis
I still have a few doubts on when to exit the stock.
(it's a little difficut to read your chart due to the resize so I'll use the icharts chart again)
On the upthrust bar the volume was lower than the previous 2 bars and the volume was actually falling for the next 7 days so in such a case wouldn't it have been called a retracement since the volume was declining with the price declines?
How would you you say on the next bar after the upthrust that it was the end of upmove? Is it because it was a down close?
Another question I had is that, since everyone was talking about economic recovery and the big rally that would follow was SM looking for higher prices but the downtrend put the brakes on it so SM didn't completely exit the stock? So in that case the stock would again start the upmove sometime right?
P.S: Suzlon came out with bad earnings so it gapped down on Monday (loss of 453cr vs 9cr or something like that). It still closed up though. Wht does that tell you?
Recently Sunpharma was in the news for their US subsidary under fire. Stock gapped down 16% from 1200 to 1000 odd then recoverd to 1200 odd subsequently.
(it's a little difficut to read your chart due to the resize so I'll use the icharts chart again)
On the upthrust bar the volume was lower than the previous 2 bars and the volume was actually falling for the next 7 days so in such a case wouldn't it have been called a retracement since the volume was declining with the price declines?
How would you you say on the next bar after the upthrust that it was the end of upmove? Is it because it was a down close?
Another question I had is that, since everyone was talking about economic recovery and the big rally that would follow was SM looking for higher prices but the downtrend put the brakes on it so SM didn't completely exit the stock? So in that case the stock would again start the upmove sometime right?
P.S: Suzlon came out with bad earnings so it gapped down on Monday (loss of 453cr vs 9cr or something like that). It still closed up though. Wht does that tell you?
Recently Sunpharma was in the news for their US subsidary under fire. Stock gapped down 16% from 1200 to 1000 odd then recoverd to 1200 odd subsequently.
Great Analysis of the chart Karthik. Absolutely Incredible
LazyTrader : Tom William's Book Master The Market clearly states that the volumes should be compared with the previous two bars however i bet to differ with this point. The actual comparison of the spread and volumes should be made from day 1 of transaction in the secondary market. The reason is because we cannot eliminate the data where Accumulation and Mark-up has taken place. Infact analysis of this data brings clarity in determining if the volume/spread is More Than Average/Average/Less Than Average . The comparison of the last two days will often present an incorrect picture of volumes and spread.
Market Makers often use bad news to re-accumulate the stock and to eliminate the current floating supply. My crappy data software is unable to open Suzlon however if you look at the charts of SunPharma it is very evident that the stock is not moving in conjunction with NIFTY50 and when the broad index tanked in Jan 2008 , Sun Pharma was still moving upwards. Visually without any raw data in front the only thing visible is accumulation from Nov 2008 - March 2009. Currently i am very Bearish on the Broad Index and visually SunPharma is showing a Negative Co-relation. It is highly probable that the stock is under re-accumulation.
Cheers
LazyTrader : Tom William's Book Master The Market clearly states that the volumes should be compared with the previous two bars however i bet to differ with this point. The actual comparison of the spread and volumes should be made from day 1 of transaction in the secondary market. The reason is because we cannot eliminate the data where Accumulation and Mark-up has taken place. Infact analysis of this data brings clarity in determining if the volume/spread is More Than Average/Average/Less Than Average . The comparison of the last two days will often present an incorrect picture of volumes and spread.
Market Makers often use bad news to re-accumulate the stock and to eliminate the current floating supply. My crappy data software is unable to open Suzlon however if you look at the charts of SunPharma it is very evident that the stock is not moving in conjunction with NIFTY50 and when the broad index tanked in Jan 2008 , Sun Pharma was still moving upwards. Visually without any raw data in front the only thing visible is accumulation from Nov 2008 - March 2009. Currently i am very Bearish on the Broad Index and visually SunPharma is showing a Negative Co-relation. It is highly probable that the stock is under re-accumulation.
Cheers
I was holding suzlon and after its high of 140 during the decline the volume was declining as well. In such a case how do we know when to exit the stock? That's one question that I can't seem to answer even after read the whole thread. What I want to know is how does the next candle signify "end of the up move"?
Can someone please explain.
Can someone please explain.
As i said earlier the comparison of volumes with the previous two days will present an incorrect picture. To see the real picture plot the volumes from the very beginning and make the comparison.
And as per my understanding of the chart , the bar where Karthik has written Confirmation of END of Upmove is because the bar has taken out the Close and the Low of Upthrust on More Than Average Volumes. Independently with Supply (Climax) in the Background an Upthrust itself is a very big Sign Of Weakness. Also the bar after Upthrust has made Lower High and Lower Low. This means that the 1st level of Support has been pierced and extra effort (More Than Average Volumes) has been put and the result is in tandem with the effort . For the time being this shows that the path of least resistance is now on the Downside. However more clarity will come on the downmove when the Low of The Climax Bar is taken out on More Than Average Volumes. The reason is because this level (Low of Climax Bar) has acted as a genuine trigger support point where prices surged and once this is pierced it can be easily established that the price will only move downwards.
After this has been pierced , visually this looks like the price is moving up on Narrow Spread on Low Volumes. In that cluster of 'Blue Bars' , the second one is a No Demand Bar and price will never surge till the time there is Demand from Professional Money.
I hope this helped in clearing some doubts
Cheers
And as per my understanding of the chart , the bar where Karthik has written Confirmation of END of Upmove is because the bar has taken out the Close and the Low of Upthrust on More Than Average Volumes. Independently with Supply (Climax) in the Background an Upthrust itself is a very big Sign Of Weakness. Also the bar after Upthrust has made Lower High and Lower Low. This means that the 1st level of Support has been pierced and extra effort (More Than Average Volumes) has been put and the result is in tandem with the effort . For the time being this shows that the path of least resistance is now on the Downside. However more clarity will come on the downmove when the Low of The Climax Bar is taken out on More Than Average Volumes. The reason is because this level (Low of Climax Bar) has acted as a genuine trigger support point where prices surged and once this is pierced it can be easily established that the price will only move downwards.
After this has been pierced , visually this looks like the price is moving up on Narrow Spread on Low Volumes. In that cluster of 'Blue Bars' , the second one is a No Demand Bar and price will never surge till the time there is Demand from Professional Money.
I hope this helped in clearing some doubts
Cheers
Similar threads
-
-
Technical Analysis based on Price Action and volume spread- Started by nilesh mishra
- Replies: 10
-
-
-