CYP (ASX) Ann: Investor Presentation

Originally posted by gavint66: ↑

Trading Volume and Price Reversals
Trading volume can also signal when an investor should take profits and sell a security due to low activity. If there is no relationship between the trading volume and the price of a security, this signals weakness in the current trend and a possiblereversal.1

For example, suppose company ABC extended its uptrend for another five months and increased by 70% in six months. The investor sees that share prices of company ABC are still in an uptrend and continues to hold on to the shares. However, the trading volume is decreasing. This could signal to the investor that the bullish uptrend in ABC stock is beginning to lose momentum and may soon end.

The following week, the share price of ABC stock decreases by 10% in one trading session after being in an uptrend for six months. This results in the stock breaking its upward trend. More significantly, the trading volume spikes higher when compared to itsaverage daily trading volume (ADTV). The investor sells out of all the shares of ABC the next day because the combination of a sharp drop in price and spike in trading volume confirmed that the uptrend might be coming to an end and a reversal might be in the offing.

Use Volume For More Trading Insight
High or increasing volume in an uptrend can signal a buying opportunity.
Decreasing volume in an uptrend may suggest that it's time to sell and take profits.
High or increasing volume in a downtrend can signal that it's best to stay on the sidelines.
Decreasing volume in a downtrend may indicate a coming reversal and a time to buy.
More involved chart patterns, including the head and shoulders and the flag and pennant, use volume to confirm trends, reversals, andbreakouts.2

What Is a Good Trading Volume?
Good trading volume for a security is hard to define because trading volume's value comes into play when looked at in context with other indicators, such as price direction and volatility. Any level of volume that provides investors with specific insight into a security's price action (and a sense of the trading interest in that security) can be thought of as a good trading volume.

What Does High Trading Volume Mean?
High trading volume (relative to past measures of that volume) that accompanies rising prices or an upward trend can signal strong interest in a security by buyers. On the other hand,high trading volumethat accompanies dropping prices or a downward trend can signal worry on the part of investors. This can result in more selling and even lower prices. High trading volume could also reflect some isolated news or event related to the company associated with the stock.

Is Low Volume Bullish or Bearish?
Trading volume is defined as the number of shares traded in a particular period of time. So,low trading volumecan indicate a lack of interest in either buying or selling. That means it could be bullishif low volume occursin a downtrend. It could be bearish if it's noted in an uptrend.

The Bottom Line
Trading volume is one of the metrics that traders watch to predict the momentum of a stock or other security. An increasing trading volume might be a sign of favorable sentiment, indicating a likely price increase. A falling trading volume might indicate that the market is losing interest. As with other technical indicators, it is important to look at a broad range of metrics before making an investment decision.

Expand

Wow. Did you get that off the back of your cereals? I am not sure what you expected to achieve on a CYP thread by posting a remedial education in trading volumes. You really are flailing in your efforts to sow FUD in CYP.

I'd best sell out of all of my MSB stock then by that logic and quickly. Volumes have fallen right off.

As if its remotely that simple a premise in CYP (or MSB)...

No.	Vol.	Price($)
4	58708	15.5¢

No.

Vol.

Price($)

58708

15.5¢

Price($)	Vol.	No.
16.0¢	9763	1

Price($)

Vol.

No.

16.0¢

9763

No.	Vol.	Price($)
4	58708	0.155
5	106673	0.150
2	45000	0.140
1	10937	0.130
1	26000	0.115

No.

Vol.

Price($)

58708

0.155

106673

0.150

45000

0.140

10937

0.130

26000

0.115

Price($)	Vol.	No.
0.160	9763	1
0.165	38474	1
0.170	70000	2
0.175	77450	2
0.180	62619	3

Price($)

Vol.

No.

0.160

9763

0.165

38474

0.170

70000

0.175

77450

0.180

62619

(20min delay)
Last 15.5¢		Change -0.005(3.13%)		Mkt cap ! $35.02M

Ann: Investor Presentation, page-95

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Open	High	Low	Value	Volume
16.0¢	16.5¢	15.5¢	$22.43K	139.5K

Ann: Investor Presentation, page-95

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