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 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 MUR stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Murphy Oil Corporation. 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 $49. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $49.00 - $49.99 | 2.89 |
| 2 | $28.00 - $28.99 | 0.78 |
| 3 | $18.00 - $18.99 | 2.28 |
| At least two layers of turbulence might act as resistance levels above the current price, particularly the one near the $71 level. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $71.00 - $71.99 | 0.96 |
| 2 | $87.00 - $87.99 | 0.37 |
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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. $25 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for MUR. |
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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 MUR 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 McCormick & Company, Incorporated. From the News Archive: (2/18/2011 ) Bad news came from Reynolds American, Inc., Dollar Tree, Inc., Zimmer Holdings, Inc., and NVIDIA Corp. |