Amarin Corp Plc (AMRN)

[FlyFishingStocks]

Michael - Volume/Price

What is your thoughts reguarding the low volume ? I was under the impression that it is always volume before price

Not always. It often depends what type of consolidation pattern is in effect.

For example, in the chart below are 2 examples (one bearish and one bullish) that show price first (breakout), followed by volume.



The first is a rising bearish wedge that traces 3 waves. The first wave = strong volume. the second reached a higher high but on much less volume (called "shortening of the upthrust" = bearish)., followed by a downside breakout and then a high volume selloff.

The second pattern is an ascending Triangle showing prices coiling towards an apex on low volume. This time however, we see both waves 1 and 2 on increasing volume while the downstrokes into 'higher lows' show declining volume. This portends a bullish wave 3 that usually shows very strong volume once it breaks to the upside and triggers short covering.

Volume is a great indicator of future price moves. In these examples it is deceptive to those who read it opposite and see low volume as bearish - as in the example of the ascending triangle.

Other times when prices approach a trendline, if volume increases, it will forecast a potential trend reversal/breakout. If volume declines as prices rise into a down trendline for example, it usually reinforces the trend and leads the trader to expect price stoppage at the falling support line (supply line).

These are by far THE most important concepts in investing/trading. This price/volume interaction/behavior is the most prognostic of any indicator (when interpreted correctly).

FFS