Page 1182 - How to Make Money in Stocks Trilogy

Don’t Invest Blindly: Use Charts to See the Best Time to Buy and Sell 165

Price Gain on Light Volume

Apple – 2012 Price
1 700
Daily Chart Bearish reversal: Hits new high,
but reverses and closes at bottom
New Highs on Low Volume of range. Heavy volume actually
shows selling, not buying.
Shows lack of enthusiasm
for higher share price.
Sellers may now start to
outnumber new buyers.
650
After long upward climb, Apple hit
new price highs, but on low and
declining volume. Stock dropped
38% over next 4 months.
© 2013 Investor’s Business Daily, Inc.
1
Volume
14,000,000
8,000,000
4,000,000
2,000,000
27 10 24 7 21 5 19
August September October
Light volume on up days or weeks could mean big investors are not enthusiastic
about the stock. May be a sign the stock will start to sell off.
Price Drop on Light Volume

Valeant Pharmaceuticals – 2011 Price 50
Weekly Chart 46
42
Volume Tells the Real Story 38
Share prices fluctuate every day and week. 34
Unusually light or heavy volume shows how 30
serious the buying or selling actually is. 28
26
24
22
Down weeks on light volume shows big
investors not selling aggressively. 19
17
Volume on UP weeks much bigger 15
than on down weeks: Reveals buying 14
© 2013 Investor’s Business Daily, Inc.
by institutional investors
Volume
25,000,000
12,000,000
6,000,000
3,000,000
Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11
Light volume on down days or weeks means big investors
are sitting tight and not selling aggressively.