Why Trade and Volume Analysis Is an Integral Part of My Methodology?
Trade and volume analysis plays a crucial role in determining optimal price levels for buying and selling securities. At Equilyst Analytics, I use a specific approach known as Dominant Range analysis, which focuses on two key aspects: trades and volume.
When conducting Dominant Range analysis, I assess the position of the volume-weighted average price (VWAP) in relation to the current price. Additionally, I consider the position of the dominant range relative to the intraday high and low.
The dominant range refers to the price range characterized by the highest trading volume and the greatest number of trades. By examining the proximity of the dominant range to the intraday high and low, I gain insights into the interest of participating traders and investors in pushing the price higher.
To gauge the level of optimism among participants regarding buying the stock at a higher price, I analyze whether the current price exceeds the VWAP or if the VWAP falls within the dominant range, particularly closer to the intraday high than the intraday low.
Achieving a sense of balance or equilibrium between the number of trades and volume at each price level is essential. This equilibrium is evaluated in relation to the individual distribution of trades and volume within each group.
The culmination of this analysis is the development of my proprietary Dominant Range Index, which encapsulates the statuses of the elements I have encoded. By leveraging my algorithm’s processing capabilities, the Dominant Range Index can yield a bullish or bearish rating.
As the fifth component of my 6-indicator Evergreen Strategy when investing in the Philippine stock market, the Dominant Range Index applies the Nash Equilibrium effect, a theory that holds considerable value in my capacity as a computer scientist and professional stock market analyst.
While the technical description of this functionality may seem intricate, I have simplified it by assigning an overall bullish or bearish rating to the Dominant Range analysis. A bullish rating implies an upward price movement is likely, while a bearish rating indicates the opposite.
The investors’ favorite prices are either a standalone price or a range of prices with the highest volume and the greatest number of trades.
Imagine you’re on the verge of buying the stock. If the dominant prices are closer to the intraday low than the intraday high, will you rush into buying, or will you wait a bit longer because the price is likely to continue moving downward?
Now, consider you’re about to realize your gains, even though your trailing stop is still in place. If the dominant prices are closer to the intraday high than the intraday low, will you rush into selling, or will you wait a bit longer because the price is likely to continue moving upward?
Picture this: it’s been 60 minutes since the opening bell. If the current price is at the intraday high itself, but the dominant prices include the intraday low, wouldn’t that make you question the sustainability of the intraday bullishness?
I’ve only presented you with three scenarios where understanding the location of investors’s favorite prices is useful in decision-making. There’s a lot more we can discuss in my stock investment consultancy service.
Top 10 Traded Stocks as of September 15, 2023
In this complimentary report, I am pleased to share the Dominant Range Index for the following stocks, along with the respective date and time stamps displayed on their charts.
Bear in mind that while there is a chance that their respective dominant ranges today may come into play again by the next trading day, that chance is not guaranteed.
At least, you know which dominant ranges you should watch out for regardless of whether you’re buying or selling.
This is not a stock recommendation but an informational analysis only.
After all, this is only a small portion of my entire methodology. Avail of my stock investment consultancy service to learn my entire investment strategy.
Bank of the Philippine Islands (BPI)
Dominant Range Index: BULLISH
Last Price: 110.00
VWAP: 110.03
Dominant Range: 109.60 – 110.50
BDO Unibank (BDO)
Dominant Range Index: BEARISH
Last Price: 129.00
VWAP: 129.56
Dominant Range: 129.00 – 130.70
Aboitiz Power Corporation (AP)
Dominant Range Index: BEARISH
Last Price: 31.60
VWAP: 31.70
Dominant Range: 31.60 – 31.60
PLDT (TEL)
Dominant Range Index: BEARISH
Last Price: 1,129.00
VWAP: 1,137.48
Dominant Range: 1,129.00 – 1,129.00
Ayala Land (ALI)
Dominant Range Index: BEARISH
Last Price: 27.15
VWAP: 27.21
Dominant Range: 27.15 – 27.40
MREIT (MREIT)
Dominant Range Index: BEARISH
Last Price: 12.20
VWAP: 12.40
Dominant Range: 12.2 – 13.00
Ayala Corporation (AC)
Dominant Range Index: BEARISH
Last Price: 619.50
VWAP: 621.43
Dominant Range: 619.5 – 619.50
SM Investments Corporation (SM)
Dominant Range Index: BEARISH
Last Price: 803.00
VWAP: 805.05
Dominant Range: 803.00 – 813.00
Semirara Mining and Power Corporation (SCC)
Dominant Range Index: BULLISH
Last Price: 34.5
VWAP: 34.87
Dominant Range: 34.90 – 35.05
Metropolitan Bank & Trust Company (MBT)
Dominant Range Index: BEARISH
Last Price: 53.10
VWAP: 53.39
Dominant Range: 53.1 – 53.65
Which of These Top 10 Traded Stocks Do You Already Have?
What’s your decision now that you’ve known this information? Let me know in the comments.
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