Description
This article is from the Glossary of
Technical Analysis Terms.
Glossary of Technical Analysis Terms: V
- Volume Accumulation:
This volume indicator addresses some of On Balance Volume's
shortcomings and was
developed by Marc Chaikin. Where OBV assigns all of a day's volume
a positive or negative value, Volume Accumulation counts only a
percentage of the volume as positive or negative, depending on
where the close is in relation to the average price of the
day. The only time the entire day's volume is assigned a positive
value is when the close is the same as the day's high. The
opposite applies for a close at the day's low.
- Volatility:
This analysis is based on the idea that stocks bottom from "panic"
selling,
after which a rebound is imminent. One way of measuring this
phenomenon is to observe a widening range between high and low
prices each day. In general a progressively wider range, observed
over a relatively short period of time, can indicate that a bottom
is near. Price tops are generally reached at a more leisurely pace
and can be characterized by a narrowing of the price range. This
measure of the trading range takes place over a specified period
in order to determine whether or not an issue is being "dumped"
and is approaching a bottom. A pre-requisite to a valid bottom is
an increase in the volatility line above the reference line. In a
similar manner, an indication of an imminent top would be a
decrease in the volatility line below the reference line. As long
as volatility is rising, in all probability a stock will not
approach a top. It should be noted that this study should be used
in conjunction with trend following analyses and momentum
oscillators for confirmation and accuracy.
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