Volume indicates how many shares are trading hands. When there is a move in the stock price, volume can show the strength behing the move when that day’s volume is compared to normal daily volume levels for the same stock.
When there is a big move in price but small volume, then the move may not be sustainable. The stock may quickly return to the old price(a gain or a loss) when there is small volume. On the other hand, large volume can indicate that the move will be sustainable and may even be building strength.
What’s more, when prices move too much and with very high volume it can be an indication of a point of capitulation, the point where the stock has reached a maximum or minimum and can be a signal for a reversal.