K Karthik Raja Rupeedesk - Volume Analysis Checklist
(For Momentum Trading & Technical Analysis)
1. General Volume Trends
✅ Is the volume increasing or decreasing over time? (Compare recent volume with historical averages.)
✅ Check for abnormal spikes (Sudden volume increases can indicate accumulation or distribution.)
✅ Compare volume across different time frames (Daily, Weekly, Monthly trends.)
2. Price & Volume Relationship
✅ Price Up + Volume Up → Bullish Confirmation
✅ Price Down + Volume Up → Bearish Confirmation
✅ Price Up + Volume Down → Weak Uptrend (Possible Reversal)
✅ Price Down + Volume Down → Weak Downtrend (Possible Reversal)
3. Breakout Volume Check
✅ Is the breakout supported by high volume? (Breakouts with low volume are weak.)
✅ Compare breakout volume with average volume (50-day or 200-day moving average).
✅ Check if the volume sustains after the breakout.
4. Support & Resistance with Volume
✅ Volume near support levels (High volume at support strengthens the level.)
✅ Volume near resistance levels (High volume near resistance means potential breakout or strong selling.)
✅ Volume-based fakeouts (If price breaks a key level but volume is low, the move may fail.)
5. Reversal & Exhaustion Volume Patterns
✅ Climax Volume (Exhaustion Moves) - Extremely high volume after a long rally/drop may indicate trend exhaustion.
✅ Divergence between price & volume - Price making new highs but volume decreasing? Weak trend.
6. Indicators for Volume Confirmation
✅ Volume Weighted Average Price (VWAP) – Helps track institutional activity.
✅ On-Balance Volume (OBV) – Confirms trends using volume flow.
✅ Chaikin Money Flow (CMF) – Helps detect accumulation/distribution.
✅ Volume Oscillators – Compare short-term & long-term volume trends.
7. Sector & Market Volume Comparison
✅ Compare stock volume with industry peers.
✅ Check overall market volume trend (NSE/BSE/NASDAQ/NYSE).
8. Unusual Volume Alerts
✅ Screen for stocks with sudden volume spikes (Unusual Volume Scanner).
✅ Check if volume is news-driven (Earnings, Announcements, Mergers, etc.).
Stage 2
1️⃣ General Volume Guidelines
✅ Is the volume confirming the trend direction?
✅ Is the volume higher on up moves than on down moves in an uptrend?
✅ Is the volume increasing in the direction of the breakout?
2️⃣ Volume & Price Action Relationship
✅ Low volume + Sideways movement → Accumulation or Distribution?
✅ High volume + Sharp upward movement → Strong buying interest?
✅ High volume + Sharp downward movement → Panic selling or trend reversal?
✅ Breakout above resistance with high volume → Strong continuation signal?
✅ Breakdown below support with high volume → Bearish confirmation?
3️⃣ Identifying Accumulation & Distribution
✅ Increasing volume + Rising price → Strong uptrend confirmation?
✅ Increasing volume + Falling price → Strong downtrend confirmation?
✅ Decreasing volume + Rising price → Weak rally, possible reversal?
✅ Decreasing volume + Falling price → Weak downtrend, potential bottom?
4️⃣ Volume Spikes & Climax Analysis
✅ Volume Climax Up → Possible temporary top?
✅ Volume Climax Down → Potential washout bottom?
✅ Excessively high volume without price movement → Absorption of supply?
5️⃣ Volume-Based Trading Setups
✅ Breakout from a base with above-average volume → Entry confirmation?
✅ Retest of breakout level with lower volume → Healthy pullback?
✅ Uptrend but sudden huge volume with no price movement → Smart money exiting?
6️⃣ Volume & Market Trends (Sector & Index Analysis)
✅ Is volume increasing in leading stocks of the sector?
✅ Is volume confirming market-wide breakouts or breakdowns?
7️⃣ Volume Indicators for Confirmation
✅ On-Balance Volume (OBV) trending up → Bullish confirmation?
✅ Chaikin Money Flow (CMF) above zero → Strong buying pressure?
✅ Volume Weighted Average Price (VWAP) level respected?
