Chapter VIII: Volume Stratification Analysis tracks the volumes associated with price levels over the entire history of a stock. The resulting analysis yields a framework for understanding the mechanism behind support and resistance levels, and a scientific basis for predicting price behaviors due to those levels. |
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| The Volumetric Profile is the central concept behind Volume Stratification Analysis. This Profile is simply the cumulative volume over the history of the stock, distributed according to price range. Here the price column corresponding to the current price of BAC stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Bank of America Corporation. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. The Volumetric average at $16 is below the Secular average at $17. This is a very un-usual condition. A few layers of volumetric turbulence exist that could provide support on the downside. The most significant of these is found around $16. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $16.00 - $16.99 | 4.76 |
| 2 | $12.00 - $12.99 | 2.83 |
| 3 | $6.00 - $6.99 | 2.48 |
| Several minor strata of volumetric turbulence could exert resistance against price appreciation, most notably, the peak at $22. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $22.00 - $22.99 | 0.75 |
| 2 | $26.00 - $26.99 | 0.72 |
| 3 | $31.00 - $31.99 | 0.68 |
| 4 | $36.00 - $36.99 | 0.64 |
| 5 | $45.00 - $45.99 | 0.61 |
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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. Two sharply defined valleys exit below the priceline at $14 and $10. The deepest is near the $10 strata. |
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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 BAC Common Stock |
| In the news, Friday, March 12, 2010: An unfavorable condition has developed with Convergys Corporation, ticker symbol CVG. Also, there are breaking events concerning ConAgra Foods, Inc. (CAG) and Pre-Paid Legal (PPD) |