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volume Archives

What is Volume in Stocks?

Volume reflects the overall activity of a stock, indicating the sheer amount of buying and selling. Next to price, it is one of the most closely watched indicators.

While many investors these days are familiar with charts in a general sense, too few pay attention to one key aspect of stock charts—volume. Trading volume represents the total number of stock shares, bonds, or commodities futures contracts traded during a certain period of time.

The simplest use of volume is just to confirm advances and declines. When a stock is making good progress in price terms, it’s good to see that volume is also up. It confirms that lots of buyers want in. Similarly, when a stock is declining, a parallel increase in selling volume lets you know that sellers are in control. Just using these two inputs, you should be able to identify good buy and sell points.

When you see a stock stage either (a) a huge gap up on big volume on meaningful news (often earnings), or (b) many days in a row of heavy buying that takes the stock to new highs, that “volume area” will often provide support during the next few weeks. And that means dips into that area represent low-risk buy points.

Big volume clues that coincide with meaningful moves in a liquid stock are invaluable—they often point to a new uptrend getting underway, or the end of a prior move. These huge moves are caused by institutional investors … and once institutions start buying or selling, they rarely stop in just a couple of weeks.

One word of advice: Stocks with low trading volume (and low prices, as well) can be very volatile, often enticing you with rip-roaring advances that make your mouth water. But beware! If a stock is trading fewer than 300,000 shares a day, you may have difficulty executing a trade in a timely manner, which could mean buying higher (or selling lower) than you meant to.

To learn more, download our FREE report, Technical Analysis of Stocks: How Relative Performance Works, Why Trading Volume is Important, and Other Chart-Reading Lessons. 

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Cabot Prime Pro Week Ending March 5, 2021

From the Cabot Prime Pro Week Ending March 5, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Cabot Prime Week Ending March 5, 2021

From the Cabot Prime Week Ending March 5, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Turnaround Letter Weekly Update

March 5, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
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Cabot Small-Cap Confidential Special Bulletin

March 5, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
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Cabot Growth Investor Special Bulletin

March 5, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks remain under the gun, and while we’re already relatively defensive in the Model Portfolio, we’re going to do a little more trimming now
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Cabot Early Opportunities Special Bulletin

March 5, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
Read More

Cabot Top Ten Trader Movers and Shakers Weekly Update   

March 5, 2021|From Cabot Top Ten Trader|by Mike Cintolo|Growth Stocks

The iffy up-down-up-down action in leading growth names starting in late January led to some key breakdowns last week, and this week, growth stocks have been routed—the Nasdaq is down nearly 4%, but most leading names are off much more than that, with coming...
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Cabot Growth Investor Bi-weekly Update

March 4, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

The sellers ran wild today, with the Dow losing 346 points, the Nasdaq falling 274 points (2.1%) and the average growth stock we own or watch down nearly 5%. From late January through late February, we began to see a change in character, a..
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Cabot Early Opportunities Special Bulletin

March 4, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

With the market continuing to weaken we’ll move incrementally more into defensive mode until the smoke begins to clear and we can better distinguish the stocks that will emerge as the next leaders. While there is a lot we could say about just any...
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Cabot Global Stocks Explorer 730

From the Cabot Global Stocks Explorer 730 issue of Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

The market is hitting a little turbulence, which is natural as it feels its way across the timing of the pandemic economic recovery, concern over debt, interest rates, and inflation.
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Cabot Small Cap Confidential 262

From the Cabot Small Cap Confidential 262 issue of Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

The Big Idea One of the unsung heroes of the online retail boom is a largely unknown technology – digital printing on fabrics and textiles. While many traditional manufacturers and retailers of clothes, fashion items and home décor were destroyed during the pandemic, the inverse true...
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Cabot Marijuana Investor Update

March 3, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

I’m tempted—I really am—to take some of our 46% cash position and move it back into marijuana stocks. Since the sector peaked three weeks ago, most of the stocks have had a decent pullback and now the best are moving up again, heading those...
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Cabot Growth Investor Special Bulletin

March 3, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks continue to bleed today, with many down 4% to 10% even as money rotates into cyclical areas. Our trend-following indicators are still positive, so we’re not selling wholesale, but as growth investors, we are turning cautious—we came into this week with in...
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Cabot Dividend Investor Weekly Update

March 3, 2021|From Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

The market has gotten a little choppy and interest rates are to blame. At least, that’s what they say. The market indexes fell last week and have been all over the place so far this week.
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Cabot Small-Cap Confidential Special Bulletin

March 3, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Arena Pharmaceuticals (ARNA) yesterday announced that olorinab failed to meet the primary endpoint in the Phase 2 CAPTIVATE study in IBS abdominal pain. This is disappointing but not remotely the reason to own (or sell) the stock. IBS is a difficult to treat condition when...
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Cabot Micro-Cap Insider Update

March 3, 2021|From Cabot Micro-Cap Insider|by Rich Howe|Small Cap Stocks

Vaccines are being rolled out, and the economic recovery will be strong in 2021. Stocks that will benefit from the economic recover should have strong tailwinds. While our entire portfolio should benefit from an improving economy, two stand out to me.
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Cabot Undervalued Stocks Advisor 321

From the Cabot Undervalued Stocks Advisor 321 issue of Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

We’re watching market sentiment gyrate sharply between “the economic reopening will boost earnings” and “the economic reopening will boost inflation”. Both outcomes are likely.
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Cabot Income Advisor Weekly Update

March 3, 2021|From Cabot Income Advisor|by Tom Hutchinson|Income Investing

After a rough week, the market is right back in business. Just when stocks appeared on the cusp of a deeper selloff, the S&P 500 started off this week with the best session since June.
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Cabot Early Opportunities Special Bulletin

March 2, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

C3.ai (AI) reported Q4 results yesterday – its first as a public company – that came in ahead of expectations but didn’t offer enough about future growth to support the stock’s valuation. Revenue in the quarter was up 19% to $49.1 million while subscription jumped...
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Cabot Profit Booster 164

From the Cabot Profit Booster 164 issue of Cabot Profit Booster|by Jacob Mintz|Options Trading

Fears of rising inflation, and what that would mean for interest rates, weighed on the market last week, especially growth stocks, which were crushed.
Read More

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