An explainer: quot;Buses pulling out of the stationquot;

This week in Momentum Monday I introduced a new section within the data table area called, “ Buses pulling out of the station”.

There is a common rule among many charting practitioners that a price rise accompanied by volume increases enhances the chances of price recovery.

To that end we have introduced a new table of stocks where we are trying to find companies who recently have experienced negative / flat sentiment, however now that may be changing due to an improvement in price AND volume. Stage analysis investor Stan Weinstein is quoted as saying, 

“Volume is a gauge of how powerful the buyers are... Never trust a breakout that isn't accompanied by a significant increase in volume.”

The logic behind this quote is quite simple, simply a spike in volume when price is going up means that more traders are committed to entering the stock than leaving it. We can tell their committed because the price is going up at the same time.

Price going up = Each seller is having their offer price filled.

However, Price going up with increased volume = Each seller has their offer (sell price) filled and more buyers are willing...