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. Here the price column corresponding to the current price of QLGC stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of QLogic Corporation. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. General Volumetric Health is 3 on a scale from 1 (best) to 3 (worst), because the price at $16 is below both the Volumetric and the Secular lines, indicating an issue that has entirely lost reputation in the market. Almost no volumetric support exists underneath the current price. |
| Several minor strata of volumetric turbulence could exert resistance against price appreciation, most notably, the peak at $18. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $18.00 - $18.99 | 9.42 |
| 2 | $39.00 - $39.99 | 0.48 |
| 3 | $74.00 - $74.99 | 0.04 |
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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. No major Volumetric Minima exist to support the current price |
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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 QLGC Common Stock |
| Wednesday, July 28, 2010: We have news on W.W. Grainger, Inc., ticker symbol GWW. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Cummins Inc. and Quest Diagnostics Incorporated. From the News Archive: (7/27/2010 ) Favorable events happened at Lexmark International, Inc., Range Resources Corp., and Zimmer Holdings, Inc.. Meanwhile, bad news came from QUALCOMM, Inc.. |