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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| Volume Stratification Analysis begins with the concept of the Volumetric Profile. This is nothing more than the cummulative volume according to price range. Here the price column corresponding to the current price of MDT stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Medtronic, 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) $32 and $13. The strongest is near the $32 strata. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $32.00 - $32.99 | 1.72 |
| 2 | $13.00 - $13.99 | 0.74 |
| To the upside, a layer of potential resistance hovers around the $46 level. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $46.00 - $46.99 | 3.75 |
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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. $17 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for MDT. |
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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 MDT Common Stock |
| Thursday, July 29, 2010: We have news on Automatic Data Processing, ticker symbol ADP. A significant moving average event has happened. Also, there are breaking events concerning St. Jude Medical, Inc. and W.W. Grainger, Inc.. From the News Archive: (7/28/2010 ) Favorable events happened at Cummins Inc. and Quest Diagnostics Incorporated. Meanwhile, bad news came from Harris Corporation and MetLife, Inc.. |