Thread by @sunilkumarc3

#weekendstudy
A🧵on Volume analysis
@KommawarSwapnil @jbotlagunta @JakeraChoudhury @kuttrapali26 @_Harsh_Mehta_ @JayneshKasliwal @sourabhsiso19 @TheVivekSinghal @rachana_ranade @nakulvibhor @caniravkaria @TulsiyanVarun
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https://twitter.com/sunilkumarc3/status/1483751850935746566

✅Most technician use multidimensional approach to market analysis by tracking the movement of 3 sets of figures- price, volume & open interest
✅Here I will share analysis on volume.

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Volume & open interest as secondary indicators:
✅Price is by far the most important
✅Volume & open interest are secondary
✅Of those two, volume is the more important.
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Volume:
✅Volume is the number of entities traded during the time period under study.
✅Because, we will be dealing primarily with daily candlestick cart, our main concern is with daily volume.
✅Volume can be plotted for weekly chart as well.
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General rule for interpreting Volume:
✅If volume is increasing, then the current price trend will probably continue in its present direction (either up or down)
✅If volume is declining, the action can be viewed as a warning that the current price trend may be nearing an end
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Interpretation of Volume:
✅The level of volume measures the intensity behind the move
✅Higher the volume, higher the intensity
✅Volume should increase in the direction of the existing trend.
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✅In an uptrend, volume should be heavier as the price moves higher, & should decrease on the price dips.
🟢Example: The upside price breakout by #sequentScientific through the Feb 2020 peak was supported by a burst if trading volume. that is bullish.(see chart)
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🟢After the breakout, the volume bar followed the #sequentScientific price trend.
✅Volume were heavier as price rising
✅Volume dropped as price weaken. ( see chart)
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Volume as confirmation in price patterns:
✅In my last tweets about chart patterns
✅Volume was mentioned several times as an important confirming indicator.
✅In an uptrend, the volume should be heavier during up moves & lighter on pullback.
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✅In downtrend, the volume should be heavier during down moves & lighter on bounce
🟢More example: #lauruslabs ( in first chart volumes follow the price direction- up on up moves & down on pullbacks)
in 2nd chart of #lauruslabs (volumes are up on down moves & down on bounce)
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Volume Precedes price:
✅Technicians believe that volume precedes price, meaning
✅Loss of upside pressure in an uptrend & downside pressure in downtrend actually shows up in the volume figures before it is manifested in a reversal of the price trend.
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✅Example : possible reversal of price trend in #pressman (W)[ see chart & volume increasing on upside and down on downside move]
✅some more example where volumes confirm the breakout/ breakdown : #lalpathlab( breakdown)
#affleindia(breakout)
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Summary:
✅Increasing volumes indicates that the current price trend will probably continue
✅declining volume suggest that the price trend may be changing
✅Volume precedes price. changes in buying or selling pressure are often detected in volume before price.
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