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| Discuss breakout at the Technical Analysis within the Traderji.com - Discussion forum for Stocks Commodities & Forex; cmlee Volume is an important Factor in Breakouts. Just to refesh.... Generally, volume follows trend, ... |
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#11
17th August 2005, 11:58 PM
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Re: breakout
cmlee
Volume is an important Factor in Breakouts. Just to refesh.... Generally, volume follows trend, that is in a rising trend volume should expand on rallies and contract on declines. In falling trends volume should expand on declines and contract on rallies. When volume contracts after an extended rally, or expands sharply after an extended decline a dramatic reversal will normally transpire. Volume and volatility contract in consolidation patterns because investors cannot reach consensus, they are undecided. Volume should expand significantly for upside breakouts. If volume does not expand the breakout is considered illegitimate. Volume may not expand for a downside breakout because falling share prices cause demoralization and inactivity among stockholders. During such circumstances, fewer shares are required to drive prices lower Karthik 
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#13
20th August 2005, 12:27 PM
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Re: breakout
Quote:
Consolidation Breakout Downside If(Ref(Fml("Congestion Index"),-5),<,15{%}, {and} If(Fml("Congestion Index"),>=,15{%}, {and} If(CLOSE,<,Ref(LLV(C,40),-5), {and} If(Mov(V,5,S),>=,1.5*(Ref(Mov(V,40,S),-5)),+1,0),0),0),0) karthik
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#15
20th August 2005, 06:19 PM
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Re: breakout
Quote:
 It depends of the stock, market and your own experience  Normally 50% increase above 60 day moving average is considered good enough for breakout on the upside. However the larger the voulme expansion the stronger the breakout. The formula considers 50% increase above the 40 day MOV of the volume. Try playing with the figures in the formula...I always do that....It gives many new insights.. Also check out the OBV Indicator along with the Breakout indicator. During breakout the OBV should also expand... Happy Experimenting karthik
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#17
20th August 2005, 10:05 PM
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Re: breakout
Quote:
karthik Last edited by karthikmarar; 20th May 2008 at 12:31 AM.
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#18
21st August 2005, 01:51 AM
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Re: breakout
CMLEE
Did you notice the latest breakout - BASF. Volume jumped from an average of 20000 to 150000. Let us see if it holds. Chart enclosed. karthik Last edited by karthikmarar; 20th May 2008 at 12:31 AM.
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#20
21st August 2005, 10:03 AM
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Re: breakout
Quote:
OBV is calculated by adding the day's volume to a running cumulative total when the security's price closes up, and subtracts the volume when it closes down Rising OBV indicates smart money flowing into the stock. Then when the public also follow suit the price increases further. A rising OBV line along with rising prices indicate strong uptrend. So the OBV line can used for confirmation of a Trend. At the same time if the volumes drops and the prices moving up indicates weakness in the trend. So divergence between the price and OBV will indicate weakness of the trend. Karthik
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