unusual volume play game

[mr_byte31]

Hi All,
I noticed for two stocks that unusual volume come in play.
suddenly a massive amount of stocks have been bought and sold.
does this indicate accumulation for institutions ? if yes, then it can be a play to buy such stock if they give a good pattern?

I added below two examples.

 

[trade4succes]

For volume you need two sides, so accumulation by certain institutions, dissipation by others, or accumulation by long term investors, dissipation by short term traders or vice versa. In any case, there was some shift in fundamentals in your examples.

 

[smallfil]

Stocks go thru 4 cycles which repeat then, repeat again. They are: 1) Phase 1 (Accumulation), Phase 2 (Mark Up), Phase 3 (Distribution), Phase 4 (Mark Down). You want to be buying in Phase 1 (Accumulation) and Phase 2 (Mark Up). Big investors and hedge funds have to spread their buying within 3-6 months when they are buying millions of shares otherwise, the share price will skyrocket and make it very costly for them. If you know the cycles and analyze the stockcharts, at a minimum you can position yourself and put the odds in your favor! The cycles repeat over and over. The big hedge funds dumps their shares onto the retail traders in Phase 3 (Distribution).

 

[mr_byte31]

For volume you need two sides, so accumulation by certain institutions, dissipation by others, or accumulation by long term investors, dissipation by short term traders or vice versa. In any case, there was some shift in fundamentals in your examples.

what exactly do you mean by fundamental change ?
In CDNS, there was no earnings in the sudden volume area so I don't expect change in fundamentals there.

 

[mr_byte31]

Stocks go thru 4 cycles which repeat then, repeat again. They are: 1) Phase 1 (Accumulation), Phase 2 (Mark Up), Phase 3 (Distribution), Phase 4 (Mark Down). You want to be buying in Phase 1 (Accumulation) and Phase 2 (Mark Up). Big investors and hedge funds have to spread their buying within 3-6 months when they are buying millions of shares otherwise, the share price will skyrocket and make it very costly for them. If you know the cycles and analyze the stockcharts, at a minimum you can position yourself and put the odds in your favor! The cycles repeat over and over. The big hedge funds dumps their shares onto the retail traders in Phase 3 (Distribution).

I lack this experience for the phases. do you have reference on how to identify those phases?

 

[smallfil]

I lack this experience for the phases. do you have reference on how to identify those phases?

Here is more information which should help you identify the cycles and more detailed explanation.

https://www.investopedia.com/articles/trading/08/stock-cycle-trend-price.asp

 

[mr_byte31]

So how you can explain this large volume spikes?

 

[smallfil]

So how you can explain this large volume spikes?

Look at the whole stockchart you posted. Those volume spikes lasted 1 day. Those two stocks are in a strong uptrend. Money is made riding the trend, called trend following. Focus on that instead! There is a lot of material in what I have posted so far. Suggest you study that and a lot of your questions probably, would be answered.

 

[tommcginnis]

So how you can explain this large volume spikes?

"Fundamentals" refers to operating/financial/reporting statistics -- new products, quarterly reports, high insider buying... If you want to explain volume spikes, look in the newswires. Do a search. Find out what happened on that date.

If nothing happened, do not trade the stock -- or you'll be left holding a very empty, very expensive bag.

 

[pipeguy]

what exactly do you mean by fundamental change ?
In CDNS, there was no earnings in the sudden volume area so I don't expect change in fundamentals there.

Isolated moves don't matter. Keep an eye what happen when the price reaches the level where big volume where observed. There should be some interesting action (in volume data) what actually give a clue what will happen next.