Accumulation’s Evil Twin
Over the past several days I’ve been beating the drum about how important it
is to watch volume. With today’s Chart of the Day, I probably will have gotten
it out of my system for awhile.Â
As I’ve said before, a sign of health in a rally or upside breakout is a big
surge in volume. That’s what they call accumulation.Â
Conversely, when I see a series of price plunges occur along with high volume,
it tells me the stage is set for a stock to head lower. That’s what they call
distribution.
 Take a look at this chart of Immunex
(
IMNX |
Quote |
Chart |
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PowerRating).Â
The two big plunges on huge volume looks worrisome and suggest
a continuation of the downtrend after the bounce off Fibonacci support peters
out. I’ll be watching for price action to perhaps hit the top of the descending
trend channel prior to a resumption of the downtrend.
Have a great weekend,
Eddie