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. The red bar marks the price range corresponding to the current price of VLO shares. |
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Blue bars depict the Volumetric Profile for various price levels of Valero Energy Corporation. The thick orange line is the Volumetric Price and the maroon line is the Secular Price. General Volumetric Health is 2 on a scale from 1 (best) to 3 (worst), because the price at $18 is below the Volumetric line at $28, indicating major problems. However, some support may still exist on either side of the $14 level. The only significant volumetric support exists in the area around the $8 level. |
| Support Level ID | Price Range | Peak Magnitude |
| 1 | $8.00 - $8.99 | 6.70 |
| 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 | 4.94 |
| 2 | $32.00 - $32.99 | 1.57 |
| 3 | $48.00 - $48.99 | 2.15 |
| 4 | $62.00 - $62.99 | 0.90 |
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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. Only one volumetric minima (valley) is to be found near the $12 level. |
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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 VLO Common Stock |
| In the news, Wednesday, July 28, 2010: An unfavorable condition has developed with W.W. Grainger, Inc., ticker symbol GWW. Also, there are breaking events concerning Quest Diagnostics Incorporated (DGX) and Cummins Inc. (CMI) |