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. The red bar marks the price range corresponding to the current price of JEC shares. |
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Blue bars depict the Volumetric Profile for various price levels of Jacobs Engineering Group Inc.. 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) $40 and $20. The strongest is near the $40 strata. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $40.00 - $40.99 | 5.39 |
| 2 | $20.00 - $20.99 | 2.46 |
| At least two layers of turbulence might act as resistance levels above the current price, particularly the one near the $76 level. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $59.00 - $59.99 | 0.49 |
| 2 | $76.00 - $76.99 | 0.93 |
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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 $26 and $11. The deepest is near the $11 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 JEC 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.. |