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 KO shares. |
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Blue bars depict the Volumetric Profile for various price levels of Coca Cola. 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) $37 and $15. The strongest is near the $37 strata. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $37.00 - $37.99 | 4.48 |
| 2 | $15.00 - $15.99 | 2.48 |
| 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. $26 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for KO. |
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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 KO Common Stock |
| Monday, February 08, 2010: We have news on American International Group, Inc., ticker symbol AIG. Some signs of an over-sold condition have become evident. Also, there are breaking events concerning Archer-Daniels-Midland and Wells Fargo & Company. From the News Archive: (2/5/2010 ) Favorable events happened at Marathon Oil Corporation, Pactiv Corporation, and Range Resources Corp.. Meanwhile, bad news came from Genzyme Corporation. |