Chapter VIII: A sophisticated method associates price levels with historical volumes. Such semi-abstract concepts as Support and Resistance may then be defined with mathematical precision. |
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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 SBUX stock is painted in red. |
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Blue bars depict the Volumetric Profile for various price levels of Starbucks Corp. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. The Volumetric average at $12 is below the Secular average at $12. This is a very un-usual condition. Two levels of volumetric turbulence underlie today's price. They are at (approximately) $18 and $10. The strongest is near the $10 strata. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $18.00 - $18.99 | 1.21 |
| 2 | $10.00 - $10.99 | 3.04 |
| Several minor strata of volumetric turbulence could exert resistance against price appreciation, most notably, the peak at $26. |
| Resistance Level ID | Price Range | Peak Magnitude |
| 1 | $26.00 - $26.99 | 1.41 |
| 2 | $30.00 - $30.99 | 0.69 |
| 3 | $36.00 - $36.99 | 0.43 |
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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. $21 is the most significant of several valleys (i.e. negative peaks) in today's profile underneath the current price for SBUX. |
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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 SBUX Common Stock |
| In the news, Tuesday, September 07, 2010: An unfavorable condition has developed with Brocade Communications Systems, Inc., ticker symbol BRCD. Also, there are breaking events concerning UST Inc. (UST) and Discovery Communications, Inc (DISCA) |