Chapter VIII: Volume Stratification Analysis (or VSA) follows price behavior in relation to historical volumes of ADM stock sales. Knowledge of these behaviors gives us a quantitative metric useful for understanding Support or Resistance Levels, and predicting their strength. |
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| Volume Stratification Analysis begins with the concept of the Volumetric Profile. This is nothing more than the cummulative volume according to price range. Here the price column corresponding to the current price of ADM stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Archer-Daniels-Midland. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. General Volumetric Health is 1 on a scale from 1 (best) to 3 (worst), because the price is above the Volumetric line, indicating some positive market sentiment. Two levels of volumetric turbulence underlie today's price. They are at (approximately) $22 and $10. The strongest is near the $10 strata. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $22.00 - $22.99 | 1.23 |
| 2 | $10.00 - $10.99 | 3.19 |
| To the upside, a layer of potential resistance hovers around the $32 level. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $32.00 - $32.99 | 1.78 |
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| Horizontal maroon lines indicate Negative Volumetric Peaks. Price intervals with these characteristics are often associated with gaps, although they sometimes operate as support levels. Quarterly and yearly turn-arounds are circled. $16 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for ADM. |
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| Here, the horizontal lines mark the points of Maximum Negative Slope in the Volumetric Profile. These strata are known to act as resistance levels against upward movement, and are sometimes associated with yearly and quarterly tops. Also, as is typical of resistance levels, they may do double duty as support, but that is not the typical case. |
For Members: Deeper Analysis, with Price Predictions for ADM Common Stock |
| Thursday, March 18, 2010: We have news on MicroSoft, ticker symbol MSFT. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Mylan Inc. and Goldman Sachs Group, Inc.. From the News Archive: (3/17/2010 ) Favorable events happened at LoJack Corp and Martha Stewart. Meanwhile, bad news came from Patterson Companies, Inc. and LSI Corporation. |