Guide

How to read Volume Analysis

Volume Analysis ranks your watchlist stocks by volume activity over the last 5 days compared to average volume. It shows which stocks are seeing unusual buying/selling participation and confirms trends with OBV (On-Balance Volume).

5-Day Volume Trend

The 5-day volume trend visualizes each of the last 5 trading days as HIGH, NORM, or LOW relative to the stock's average daily volume.

ClassificationThresholdVisual color
HIGH> 1.5× average volumePurple bar — strong participation, institutional interest or event-driven
NORM0.5× to 1.5× averageGray bar — typical volume, no unusual activity
LOW< 0.5× average volumeOrange bar — weak participation, lack of interest or holiday period

How to read the bar chart: Each colored segment represents one day. The chart shows the distribution of high/normal/low volume days at a glance.

Example: A stock showing “3H 2N 0L” (3 high, 2 normal, 0 low) had strong volume on 3 of the last 5 days — likely an active stock with news, earnings, or institutional activity.

Volume categories

Each stock is assigned a category based on its 5-day volume pattern:

CategoryCriteriaTypical interpretation
Surge4+ HIGH days out of 5Sustained high volume, significant event or strong trend. Institutional participation likely.
Elevated2-3 HIGH daysAbove-average participation, trending or news-driven. Active stock.
NormalMostly NORM days, <2 HIGH, <2 LOWTypical volume profile, no unusual activity. Baseline state.
Below Average2-3 LOW daysWeak participation, consolidation or lack of interest. Low liquidity risk.
Dry Up4+ LOW days out of 5Very low participation, possibly coiling for move or just ignored. Illiquid.
Color coding:Surge→Normal→Dry Up

Volume Score

Volume Score = (HIGH days × 2) + NORM days - LOW days

This simple formula assigns weights to volume days and produces a single number for ranking. Higher scores indicate more sustained high-volume activity.

ExampleScore calculationResult
3 HIGH, 2 NORM, 0 LOW(3 × 2) + 2 - 08 (strong)
1 HIGH, 3 NORM, 1 LOW(1 × 2) + 3 - 14 (neutral)
0 HIGH, 1 NORM, 4 LOW(0 × 2) + 1 - 4-3 (weak)

Stocks are ranked by volume score from highest to lowest, making it easy to find the most active stocks at the top of the table.

OBV Trend

On-Balance Volume (OBV) is a cumulative indicator that adds volume on up days and subtracts volume on down days.

OBV trend (rising, falling, neutral) shows whether volume is flowing into or out of the stock over time. It is a volume-weighted momentum indicator.

OBV TrendWhat it signals
RisingVolume weighted toward up days. Buying pressure, accumulation. Confirms uptrends.
FallingVolume weighted toward down days. Selling pressure, distribution. Confirms downtrends.
NeutralVolume balanced between up and down days. No clear directional pressure.

Key insight: OBV divergence from price is powerful. If price rises but OBV falls (or vice versa), it suggests weakening trend strength.

Bullish divergence: Price makes lower lows, OBV makes higher lows → buying on dips, potential reversal.

Bearish divergence: Price makes higher highs, OBV makes lower highs → distribution into strength, potential top.

How to use this analysis

Finding breakout candidates

Look for “Surge” or “Elevated” category stocks with rising OBV. High volume with accumulation signals strong institutional buying — often precedes sustained moves. Combine with momentum and price near support for best setups.

Confirming trend strength

Check if volume and OBV confirm price trends. Uptrend with rising OBV and elevated volume = strong trend. Uptrend with falling OBV = weak, distribution may be occurring.

Avoiding low-liquidity stocks

Stocks with “Dry Up” category have very low participation. These may have wide bid-ask spreads and slippage. Avoid for large positions or short-term trades unless deliberately entering during accumulation phase.

Volume spikes as alerts

When a typically low-volume stock suddenly shows “Surge” category, investigate. Could signal earnings, news, acquisition rumors, or insider activity. Early detection of volume changes can identify opportunities before they become obvious.

Important caveats

  • Not financial advice. Volume analysis is informational, not a trade recommendation.
  • Relative to stock's own average. “High volume” is relative to each stock's normal volume. A high-volume day for a small-cap stock may still be less than a low-volume day for a mega-cap.
  • Context matters. High volume on a down day (distribution) means something different than high volume on an up day (accumulation). Check OBV trend and price action together.
  • OBV is cumulative. OBV values themselves are meaningless; only the trend direction matters. Do not compare OBV across stocks.
  • Events cause spikes. Earnings, FDA approvals, M&A news cause volume spikes. These may be one-time events, not sustained trends. Distinguish between event-driven and organic volume increases.

Access Volume Analysis from the Analysis page under the Volume tab.