The pattern of price behavior for Southwest Airlines (LUV) is one we are seeing on many stock charts at present with weak efforts to rise being followed by reversals and all played out against the framework of volume price analysis which reveals the truth behind the price action. In this case there we two anomalies arriving in a short period last week and which would have alerted stock traders and investors to the impending weakness. So what were they?
First, note the price action of the 28th/31st of January along with that of the 1st of February. The first is a deep hammer candle arising on the 28th of January with a very deep wick to the lower body but look at the volume which would seem to be anomalous given the range of the move. This is followed by an even more curious day, where we have a wide spread up candle on what we can only describe as average volume. The price spread is wider than any equivalent benchmark candle on the chart yet the volume is almost half, so another clear anomaly.
Finally, we arrive at the candle of the first of February with volume falling for the third day. So not only do we have a stock rising on falling volume, that volume is anomalous in its own right and as such little wonder the stock duly reversed off the VPOC (volume point of control) at $45. Moreover, even if this had not been the case, any approach to the VPOC would have sent a strong signal that a pause and congestion would be likely. However, when taken with the associated volume profile in the move, a reversal more likely which was duly delivered.
By Anna Coulling
#vpa
Anna, they will not tell you that 30 pilots have died of the jab, gets to there brain at high heights, blows them up?