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A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits by Michael C. Thomsett

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Trends with Volume-Marked Breakouts

Volume often marks changes in the trend other than reversal or continuation. There are times when unusual price patterns and volume spikes together should draw your attention by revealing that something in the trend has changed.

For example, the chart in Figure 9.2 shows specific instances of price peaks.

Image

Figure 9.2 High volume at price peaks (Chart courtesy of StockCharts.com)

Large volume spikes appear, which signals some type of change in the current trend. It is easy to assume that it always marks reversal, and once price gaps down and backs into the previous range with another volume spike, the assumption ...

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