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Candlestick Charting For Dummies® by Russell Rhoads

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Considering Additional Information Included on Candlestick Charts

In addition to the basic information (described in the earlier sections of this chapter), most candlestick charts automatically include many other pieces of data. This added data allows you to quickly digest how the stock has traded in the past and gives you some fundamental activity, such as dates of earnings releases or dividend payments, which may also appear on charts.

In this section, I clue you in on a few pieces of information that may be included on your candlestick charts.

Volume

In trading lingo, volume is the number of shares traded during a certain period of time. A volume measurement usually appears in the bottom quarter to bottom third of a chart. Figure 3-3 is a chart of Google showing roughly 60 days leading up to July 19, 2007.

In the bottom of the chart in Figure 3-3, daily volume for Google’s stock has been between 1 and about 11 million shares per day during this period. Notice the second trading day in July, which was July 3, just before a mid-week Independence Day holiday. That was a half day for the market, and the volume measurement is barely a blip. On the other end of the spectrum, have a look at the high volume on the last day of the chart. That high volume came in anticipation of the earnings that were to be released after the market closed. And the volume measurement on the last day of the chart doesn’t even include the 4.5 million shares traded after the 4 p.m. close!

Figure ...

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