STOCK GOODIES PLAYS OF THE WEEK

[Black_NITE]

EquiVolume Chart Support/Resistance Breaks

Volume is important for validating a move in particular support or resistance breaks. A break on low volume is not as convincing as a break on high volume. Low volume shows tepid interest and weak buying or selling pressure. In contrast, high volume reflects elevated interest and strong buying or selling pressure. Chart 4 shows Caterpillar (CAT) with two small breakouts followed by one big breakout. The stock formed a falling wedge into early July and broke the trend line with the widest EquiVolume box in over a month. A break above the late June high was followed by a gap and another wide candlestick. Buying pressure was slowing picking up steam. The final, and biggest breakout, occurred with another gap and move above 38. This EquiVolume box is no doubt the widest in the last two months, which means buying pressure was the strongest in two months. Volume clearly confirmed these breakouts.



The next chart shows Intuit (INTU) breaking support with a wide EquiVolume box. This move showed strong selling pressure that broke the September lows.