Stock Price and Volume Techniques

Stock Price and Volume Techniques - 15-1Stock Price and...

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Unformatted text preview: 15-1Stock Price and Volume Techniques•The Dow Theory –The oldest technical trading rule–Stock prices as moving in trends analogous to the movement of water–Three types of price movements over time•Major trends are like tides in the ocean•Intermediate trends resemble waves•Short-run movements are like ripples–Exhibit 15.7 shows the typical bullish pattern15-2Exhibit 15.715-3Stock Price and Volume Techniques•Importance of Volume–Technicians watch volume changes along with price movements as an indicator of changes in supply and demand–The technician looks for a price increase on heavy volume relative to the stock’s normal trading volume as an indication of bullish activity–Conversely, a price decline with heavy volume is considered bearish15-4Stock Price and Volume Techniques•Support and Resistance Levels–A support level is the price range at which the technician would expect a substantial increase in the demand for a stock–A resistance level is the price range at which...
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Stock Price and Volume Techniques - 15-1Stock Price and...

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