Here’s Why We Watch For Volume Clues
Technical trading decisions are
based upon price, but to gain an extra edge when looking for an entry,
“see” if others are interested at that particular moment as well. The
way to do this is by focusing on intraday volume, and using it as a confirming
indicator in your trading decision.
11:36:14
Intraday
Setup Alert
From the Nightly Daytraders
Report Symantec is holding an intraday
uptrend line, after recently testing prior session highs. The stock
witnessed a large volume spike on the test, but appears poised for a retest of
this resistance level. Keep an eye on this sector leader, as quite often, the
second time is the charm. SYMC is up .07 at 46.88.
From the chart of Symantec it’s quite obvious that other traders were
also seeing the same thing, as the first attempt at a breakout had a huge volume
spike. In the present environment, it seems that breakouts are usually greeted by
anxious sellers, and for the most part, they’ve been paid quite nicely for
establishing those trades. In today’s action, it looked to be a similar story
with SYMC, as another strong stock that has weathered the storm, was still not
strong enough to sail upstream…..or was it?
In this case we noticed that the stock was able to hold onto price supports,
indicating a possible “fleecing” of breakout players, before the real breakout.
The moral of this story is that sometimes the secondary indicator is more than
optional component to taking the trade.