Chapter 3 Definitions, Structures, & Examples
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Nirvana Systems Inc.
3-27
Profiting with Chart Patterns
Volume Trend: ST Jude Medical.
This example of a Volume Trend occurred on ST Jude Medical (STJ). You can see
that price is shooting way down and very hard with a lot
of volume on that final bar
at about $55. Then, volume begins to reduce on the back side of that spike. It takes
two to four bars and is reducing in size, but the price is continuing to the downside so
that constitutes a Volume Trend pattern.
Figure 3-26.
Volume Climax and Volume Trend Shown on the Chart for First Energy Corp.
As
volume is decreasing, price is actually decreasing as well. That indicates that the
trend is intact. This particular trade would have lasted from $53.30 to the exit at $51,
giving us a 4% gain on that trade.
Figure 3-27.