Chapter VIII: A sophisticated method associates price levels with historical volumes. Such semi-abstract concepts as Support and Resistance may then be defined with mathematical precision. |
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| Volume Stratification Analysis begins with the concept of the Volumetric Profile. 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 IBM stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of International Business Machines. 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. A few layers of volumetric turbulence exist that could provide support on the downside. The most significant of these is found around $18. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $162.00 - $162.99 | 0.08 |
| 2 | $142.00 - $142.99 | 0.11 |
| 3 | $124.00 - $124.99 | 0.71 |
| 4 | $98.00 - $98.99 | 1.51 |
| 5 | $74.00 - $74.99 | 2.41 |
| 6 | $44.00 - $44.99 | 1.38 |
| 7 | $18.00 - $18.99 | 12.20 |
| Looking above today's price, there no significant resistance level to act as a ceiling on upward movement. |
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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. $150 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for IBM. |
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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 IBM Common Stock |
| Friday, February 18, 2011: We have news on Fiserv, Inc., ticker symbol FISV. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Zimmer Holdings, Inc. and D.R. Horton, Inc.. From the News Archive: (2/18/2011 ) Favorable events happened at Robert Half International Inc. and Southwestern Energy Company. Meanwhile, bad news came from McCormick & Company, Incorporated and Reynolds American, Inc.. |