If the price bar serves as a hidden indicator in technical trading, so also does a stock’s volume. Yet all too often, technical traders discount volume’s importance.

Volume doesn’t measure the number of shares offerred or bid, but the number of trades completed. It therefore serves as a raw manifestation of market sentiment for the stock at any given time. A rising or falling price may be merely a few traders moving shares about. But a price that is rising on a significant spike in volume is a stock that has captured the market’s interest, a stock that’s going places. Similarly, a price falling on a significant volume spike is a stock that sellers want to unload, fast, driving the price ever lower. Read More…