If you glance at a daily chart for GROW going back a few months, notice the significant difference between volume levels in July and August compared to September and October. Clearly, once can easily see a paradigm shift. In addition, a huge volume spike - well into peak levels - of five million shares can often alter the Dry Up Volume calculations. However, eyeballing a daily chart reveals some interesting developments prior to today's lift-off in price. We see lateral price movement combined with decreasing volume levels (the classic dry up maneuver). In addition we see Stochastic (5,2,3) head higher and a rising MACD Histogram. All these signs indicate a possible buy situation under development. The only cautionary signal occurs as price found itself in the midst of an intermediate term down trend. As a result, we appear to be trading the non-dominant traverse. Nothing wrong with doing so. We just need to keep in mind that these price runs don't always make the 10% returns - unless we happened to catch the non-dominant traverse which turns into a new trend in the opposite direction. In other words, you need to exercise additional caution when trading the non-dominant traverses, just as you would when shorting a Hershey stock as price bounced off the left trendline in an uptrending stock.
- Spydertrader
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