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 TechniquesThe Dow Theory The oldest technical trading ruleStock prices as moving in trends analogous to the movement of waterThree types of price movements over timeMajor trends are like tides in the oceanIntermediate trends resemble wavesShort-run movements are like ripplesExhibit 15.7 shows the typical bullish pattern15-2Exhibit 15.715-3Stock Price and Volume TechniquesImportance of VolumeTechnicians watch volume changes along with price movements as an indicator of changes in supply and demandThe technician looks for a price increase on heavy volume relative to the stocks normal trading volume as an indication of bullish activityConversely, a price decline with heavy volume is considered bearish15-4Stock Price and Volume TechniquesSupport and Resistance LevelsA support level is the price range at which the technician would expect a substantial increase in the demand for a stockA 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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