11th Sept 2011–Pattern Study–Volume does matter!

Ticker:

 

1. SIFY

 

Topic:

 

1. Volume does matter !
2. My good friend ask me one question on Friday on Skype, "did you check the volume when you trade?"

 

Lesson Learnt:

 

1. This is a 1 year chart. Each candle represent 2 days.
2. At point 1, price burst through the 20MA line with high volume. This high volume is not obvious in this chart. You need to squeeze the chart to the left side in order to see that.
3. At point 2, price continue to burst through the rest of the MA lines with much higher volume. It is a determination that trader are going in big time. Price continue to go up after that.
4. As usual, if you missed out the rally, stay cool. Be patient. Within 2 months, the price start to cool down slowly. It tried to recover when it came back to 20MA line, however, it failed. From there price started to go down again.
5. In mid of Nov 2010, price start to rest on the MA lines again.
6. Just before the end of the Nov, price started to burst up again, however, there is no high volume that follows. Price fluctuate around the 20MA line and not able to make higher high.
7. At point 3 and point 4, high volume came in. Price finally broke the high of Nov month.
8. Yet after making higher high compare to the high at end of Sept month, the price started to cool down again. This time the waiting time for the next entry is shorter --- 1 month.
9. When price came back to the 20MA line again at point 5, another volume that is larger than average came back in. A retest of the 20MA line and that is it. The price started to burst all the way up. More and more volume started to come in starting from point 6.
10. Just before the end of April, a bearish engulfing occurred with high volume. A sign to throw in your towel.
11. At point 7, another high volume came back in to reverse the down trend. However, price could not maintain and start to drop further. In this case, stop loss might be able to get you out.
12. For the month of June, July and August, the reaction has shown that the bottom might be at $4.00. Pay attention that the volume has started to reside very nicely since the start of August. Aren't this is what the traders are looking for?     ;-)

 

Intraday Chart

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Historical Chart