Richard W. Arms Jr. On occasion it seems as though a stock or commodity must have discovered anti-gravity. It moves upward with little effort. Such a move is characterized by increasing volume but similarly increasing price spread on the upside, and the intervening pullbacks entail lighter volume and tighter price spreads. When such a stock or commodity is on the move there can be little trouble recognizing its strength. At other times, however, moving a stock higher is much like Sisyphus trying to roll his boulder up a hill.
Every attempt is met with heavy resistance.
Such action is easily recognized if one pays attention not only to price action but volume. Each advance is met by resistance, causing narrow trading ranges on comparatively heavy volume, while each decline is done on relatively light volume compared with the trading range. Volume is not the whole story. It must be viewed in relation to trading range. This method of charting places volume rather than time on the horizontal axis, so that each day is represented by a box rather than by a line as in the traditional bar-charting technique.