Excessive volume

Discussion in 'Technical Analysis' started by tttinvest, Apr 2, 2004.

  1. OK Guys,

    I have a question about volume and price, DB, are you out there? I can't get the chart to load, but the symbol is rnbo. Notice the huge volume yesterday that only took the price back to support. What I want to know is what does it mean when there is excessive volume on a single day and the price barely moves. Any help is appreciated.
  2. I expect by now, that everyone realizes the chart that I was looking at was old. It was still in my database. It is now cleaned out. Does anyone have an answer or is this so easy that it doesn't deserve an answer?
  3. dbphoenix


    Volume reflects the number of shares traded. The more volume, the more shares traded. Assuming that there are no order entry or data transmission errors, think of the volume as effort. Then look at the result.

    If there's big volume, then there's a lot of demand being met with a lot of supply. If the price rises, the demand is absorbing that supply and pushing price even higher. If the price falls, ditto the demand and supply, but the demand is being overwhelmed by the supply. If the price doesn't do much at all, the demand is there, and it's absorbing the supply, but it's insufficient to advance the price. The last is characteristic of distribution., particularly at tops.
  4. Are you sure RNBO is the correct symbol???

    I typed it in both my two data vendors charting program...no such symbol.

    Next I went to Yahoo! Finance to get a quote...no such symbol.


    Maybe this is a penny stock (bullentin board) or something???

    If you want to post a chart...make sure its a .gif or .jpg file and not a .bmp file.

    If its too large...than edit the chart using something like Snagit to upload an image with only the important information...


    I did find a chart by a company called Rainbow Technologies Inc that either stopped trading or changed its symbol around mid-march in the $13 price range (13.58 was the last quote).

    P.S. You need to either update your database or figure out a way to better manage it...your wasting a lot of time following companies that either don't trade anymore or have changed their symbol while your still following old information.

  5. The volume was merger related. It traded last on 3/15/04 and merged with SFNT. So the volume spike is merger arbitrage related. It merged with SFNT
  6. dbphoenix


    Fortunately, the why doesn't really matter. Lots of effort, little or no result. Therefore, regardless of the why, it's not a suitable vehicle.
  7. In supply/demand theory, M&A is regarded as the limiting case. The anti-Columbus syndrome results (chart ends at the edge).
  8. Big volume, little move = red flag, could be a reversal

    anyway I think volume is misleading especially in the indexes so I would not read too much into it.

    Has anyone noticed the big volume in ETF's last month, pull up a chart and you will see, huge volume on the Q's, with no comparison on the Nasdaq . Does anyone know what caused this? other than just the gaining popularity of ETF's ...
  9. I did clean out my database and took rnbo out. Look at drxr on Thursday and see what it did on Friday. Look at astm on Friday. Both days are huge volume days with no movement out of a range.
  10. dbphoenix


    Actually, volume can't be misleading. It just is. The only thing that can be misleading about it is one's interpretation of it.
    #10     Apr 4, 2004