Confirmation Trends with Volume
A stock’s price trend, when confirmed by volume, is easy to spot. Price movement, along with rising volume signals, indicates strength. When volume falls, the indication is that the trend is weak or getting weaker. When the two disagree, trend analysis takes on a more interesting form. However, the most basic relationship between price and volume is agreement concerning price and volume of trades.
Figure 9.1 demonstrates how this works. This stock is undergoing a primary bullish trend through the two years shown in the chart, and throughout, strong price surges were confirmed by volume.
Figure 9.1 Using volume ...
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