A low volume pullback is a technical correction toward an area of support that occurs on lower-than-average volume. Since the move occurs on low volume, traders often attribute the pullback to weak longs locking in profits rather than a reversal. Frequent moves that occur in "Low volume consolidating" opposite direction of a trendwhich are accompanied by low volumeare normal fluctuations and generally deemed to be insignificant.
The chart shows three low volume pullbacks occurring within a significant uptrend Low volume consolidating a high volume pullback that signaled a more prolonged reversal in price. Each low volume pullback was followed by a subsequent resumption of the overall trend, as weak traders took profits off the table before more bullish investors entered the market.
By comparison, the high volume pullback lasted for several days and the ETF was considerably more volatile in the aftermath as investors questioned whether the long-term trend was still in place.
Long term investors may also take these opportunities to add to their positions at a lower price and decrease the cost basis of their overall long positions, which creates an opportunity for more upside. Traders will use indicators, such as the on-balance volume OBVto find situations where the trend and the volume are diverging.
Low volume consolidating If the trend is moving higher and volume is decreasing, trades may look for a potentially longer-term reversal to occur since there are fewer longs for pushing the stock higher. High volume pullbacks are also a sign that the market may be ready to reverse.
In these instances, long traders may exit their positions and long-term investors may lock in some profits. Traders often look at many different factors when determining if a pullback is temporary or long-term.
While volume is a reliable indicator, it's Low volume consolidating important to look at chart patterns, such as key support and levelsand technical indicators, like the relative strength index RSI or moving average convergence-divergence MACDto confirm these sentiments. What is a 'Low Volume Pullback' A low volume pullback is a technical correction toward an area of support that occurs on lower-than-average volume.
Up volume generally refers to an increase in the volume of shares A price by volume, or PBV, chart is a horizontal histogram plotted Pullbacks, in technical analysis, generate all sorts of trading opportunities after an active trend thrusts higher or lower.
These are some of the strongest healthcare sector ETFs and the levels at which to consider buying them. Current prices represent a buying opportunity, but further declines could signal a reversal of the long-term uptrend.
These three stocks have recently pulled back, but remain in overall uptrends. Watch for movement back to the in alignment with the trend. Short-term pullbacks provide opportunities to enter trades in the longer-term trend direction. Over the last three months technology stocks have been some of the best performers.
Check these very strong ETFs to participate. Trading volume, or volume, is the number of shares or contracts that indicates the overall activity of a security or market Read about the formula and calculation for on-balance volume OBVwhich is a technical indicator showing Low volume consolidating in trading Discover why trading volume is higher when the price of a security changes.
Supply and demand is the mechanism through which Volume is generally less than the volume rise in g1.
Also a rule I use is that the fall back should not penetrate the low of the low of the first candle in g1. Consolidation refers to the process by which soils change volume in response to a change in.