Price volume indicator or momentum indicator is an indispensable tool for both traders and investors. Price and volume is never looked in isolation rather the correct interpretation of the direction of the movement is only gauged by studying them together. Price and volume are very closely related. If price movement is supported by high volume it confirms the momentum in that direction.
- Price rise with increase in volume indicates bullish trend in the stock
- Price rise with decreasing volume indicates lack of interest in buying at the higher price and is thus bearish indicator.
- Price fall with increasing volume indicates bearish sentiment on the stock.
- Price fall with decreasing volume indicates lesser number of sellers at lower level and is thus a bullish indicator.
Post a Comment