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 DAL stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Delta Airlines. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. The Volumetric average at $19 is below the Secular average at $24. This is a very un-usual condition. Almost no volumetric support exists underneath the current price. |
| At least two layers of turbulence might act as resistance levels above the current price, particularly the one near the $27 level. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $27.00 - $27.99 | 1.80 |
| 2 | $49.00 - $49.99 | 0.84 |
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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. No major Volumetric Minima exist to support the current price |
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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 DAL 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. |