Concept Volume: How to plan your trade with help of volume

23 gen 2023

Concept Volume:

(1): We have got a clear uptrend till now (pls check the example shared) until a good volume (red) candle comes out of nowhere, as mentioned - (1).

This is the first sign of weakness in the trend, long positions need to be trailed after that, one should avoid creating long positions. & high of this zone could be monitored serious turning point zone.

Here, in Aarti Industries we have seen a clear breakout. Though the trend is intact & till now we have only encountered a single speed breaker, we should consider this as a sign of caution.

(2): candle completed the week of 4th Oct. 21, is the blow-off top. After the big move-up, we have got an extremely low volume Doji.

How could be possible to have a Doji after a good move-up? (acceleration than a pause in the momentum)

(3) After approaching again at the psychological resistance, this got rejected forming an engulfing. But before this why this reversal happened let us find it.

Check the following candle-

18 Oct 21: good volume spread & good volume candle,

25 Oct 21: low volume spread & low volume candle, why? If the trend is intact it should not happen

1 Nov 21: a Doji-type candle with ultra-low volume. Are bears no more interested in taking the stock further down?

15 Nov 21: First avg. volume green candle after 5 red candles. High is marked as a psychological resistance.



Now, check 28 Feb candle, it has finally broken the support (maximum traders enter here, considering the good opportunity to go short & it is ideally a good one but if entered, it has tested the patience)

also, check how could be possible that this breakout candle has a low volume than the last one, in the trend?

All of this is basically an anomaly.

From here, the trend got reversed making 5 green candles that retraced the red ones till their resistance level as mentioned (4).

From 11 April 22 we have got 5 candles, in the trend and aligned with the volume



Now, if you notice the three candles formed after 30 May 22, you see the pattern is not aligned with the volume (the market is going down but the volume is decreasing along with the size of the candle---AN ANAMOLY)

CASE STUDY

(aarti industries)