Stocks don't surge by accident. There must be big demand for a stock to have a successful trip up. Volume reflects this.
Trade on the breakout day should be strong. You also want to see the entire week's volume higher than the previous week. This occurs 90% of the time among sound breakouts.
When institutional investors jump into a stock, it's likely you'll notice their tracks.
Big players don't buy tiny positions like retail investors. They'll scoop up thousands of shares at a time. Institutions account for more than 75% of the buying of leading stocks. That's why tracking their actions is absolutely key.
You can check a stock's daily volume and volume percentage change every day in Investor's Business Daily. Log on to investors.com to track volume changes during the day. When a stock breaks out, volume should rise at least 50% above average.
To compare a stock's volume from week to week, consult a weekly chart. They're available on IBD's Web site. Blue bars denote up weeks; red bars are for down weeks.
In a cup-with-handle base, a good handle forms when the stock's lows drift downward for days or weeks. The action shakes out uncommitted holders.
Volume should shrink during this time, the calm before the storm. Once a stock pops out of its handle, watch for volume to soar.
News 
Market Data 
Discover 
AI
