🌟 Capital Market Chronicles – Episode 235: TECHNICAL ANALYSIS – VOLUME (Part II)
🎬 “If price is the hero, volume is the hidden director.”
🔍 Why Volume Matters
4️⃣ Spotting Reversals 🔄🔥
Volume often gives advance hints that price alone won’t show.
For example:
If a stock has been falling for weeks and suddenly big buying volume appears, even before the price moves up —
👉 Someone BIG is accumulating! 🧑💼💰
👉 A reversal could be near
⚡ It’s like the first drop of rain before a thunderstorm — subtle but powerful. 🌧️
5️⃣ Tracking Institutional Activity 🏦🐳
Big institutions (the “whales”) buy and sell in massive quantities.
When you see:
-
Sudden volume spikes
-
Huge bars even without big price movement
It often means institutions are quietly entering or exiting.
Retail traders create ripples… institutions create tsunamis. 🌊
🐋Follow the volume, and you’ll know when the whales swim by!
🎯 How to Analyse Volume Effectively
1️⃣ Confirm Price Movements 📈🔍
Price going up but volume falling?
👉 Trend may be weakening
Price rising WITH rising volume?
👉 Strong demand, reliable uptrend
Volume is like checking if the “likes” match the “views” — it shows real engagement 😄👍
2️⃣ Analyse Resistance Levels 🧱🔨
When the price approaches a known resistance:
-
High volume → Price may break and stay above
-
Low volume → Price may just poke, get rejected, and fall back
💪 It’s like trying to push open a heavy door — without strength (volume), it won’t budge! 🚪😆
3️⃣ Spot Real vs. Fake Breakouts 🎭⚠️
A real breakout = strong volume
A fake breakout = weak volume
Fake breakouts trap traders like a “BUY 1 GET 1 FREE” sign outside a shop that’s actually closed. 🚪❌😂
4️⃣ Validate Up-Trends 🚀📈
In a genuine uptrend:
-
Price ↑
-
Volume ↑
😬 If price rises but volume drops, the trend may be losing energy — like a phone at 5% battery 📱🔋
5️⃣ Detect Divergence 🧭🔄
Divergence = Price and volume moving in opposite ways
Examples:
-
Price rising but volume falling 👉 Trend weakening
-
Price falling but volume falling 👉 Selling pressure easing → possible reversal
👀 It’s like someone smiling while their eyes say, “I’m tired.” 😅
📚 Real-Life Examples
📌 Example 1
Stock breaks resistance at ₹500
👉 With high volume → Strong breakout, likely to continue rising
📌 Example 2
Stock trading with unusually low volume
👉 Lack of interest → Possible stagnation or reversal
📌 Example 3
Downtrend for months + sudden volume spike
👉 Big players likely accumulating → Reversal coming
🎁 Summary
Volume is not just another indicator — it’s the context behind every price move.
It tells you:
✔ Trend strength
✔ Breakout validity
✔ Market interest
✔ Institutional activity
✔ Reversal signals
🚀 Master volume, and you’ll trade with more confidence than ever! 📊😄
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