I’d like to share with you the price-volume distribution charts of the top 10 gainers as of October 11, 2016. These are BLOOM, SCC, MCP, WEB, PLC, MBC, CAL, ARA, EURO, and LRW.
I consider my price-volume distribution calculator as an alternative tool for those who do not have an access to intraday charts (1, 5, 10, 15, 30, 60 minute intervals). One of the reasons why I created this is to make it easier for me and my clients to identify the price points that were traded the most. In short, it helps us see the “favorite” price points of traders for any stock.
The price point at the very top of the chart is the intraday high. The price point at the very bottom is the intraday low. When most of the volume is printed towards the upper half of the chart, that tells us that bulls are in charge and there is an interest to register a new intraday high.
On the other hand, if most of the volume is printed towards the lower half of the chart, it tells us that bears are the dominant players in the game. There is a high probability for the stock to close at or near the intraday low. There is also a chance for a new intraday low to be registered.
Nonetheless, you’ll have to check for cross trades, especially when one volume bar is significantly longer than the rest of the volume bars. Sometimes, it’s easy to determine if and when a cross trade happened at a certain price by looking at the number of trades made in consonant to the volume bar.
If only a few trades happened at a certain price but the volume bar at that price is significantly longer than the rest, a cross trade or trades might have happened at that price. There’s a portion in my Price-Volume Distribution calculator where you can check that.
I’m sure you’d like to ask, “So what if there’s a cross trade at a certain price?” In layman’s term, a cross trade is a transaction made by two parties with the exact same broker. Cross trades that were made in big volumes should be removed from the picture when you make a data-driven decision.
If you’re not observing the size of the volume compared to the number of trades, a cross trade might make you believe that there’s a significant interest to buy or sell the stock at a certain price. For example, if a huge cross trade happened near the intraday low, it could give you a fake perception that a sell-off has already happened. In the same way, if a cross trade happened near the intraday high, it might give you a fake signal that a bullish reversal has already started.
BLOOM – BLOOMBERRY RESORTS CORPORATION
SCC – SEMIRARA MINING AND POWER CORP
MCP – MELCO CROWN (PHILS) RESORTS
WEB – PHILWEB CORPORATION
PLC – PREMIUM LEISURE CORPORATION
MBC – MANILA BROADCASTING COMPANY
CAL – CALATA CORPORATION
ARA – ARANETA PROPERTIES, INC
EURO – EURO-MED LABORATORIES PHILS
LRW – LEISURE AND RESORTS WARRANTS
Do you find this helpful? Let me know in the comments.
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