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Technology Stocks : Vari-L (VARL)

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To: Bosco who wrote (1382)11/18/1999 5:42:00 AM
From: Allegoria  Read Replies (2) of 2702
 
Hi Bosco,

My preference w.r.t. volume indicators is OBV. On-balance volume (OBV)is an indicator that is a running total of volume that reflects the accumulation or distribution of shares. Each day's volume is assigned a positive or negative value depending on whether prices closed higher or lower that day. A running total is kept by adding or subtracting the volume depending on the direction for the day. The resulting points are then plotted on a chart (fifteen days of tracking volume is probably a good start).Note that the direction of the OBV line is the thing to watch -- it will often confirm the underlying strength or weakness of a price trend. Also, an OBV line can signal a stock's peak by declining while a stock' s price is still on the rise (such a scenario indicates that big money is leaving the stock).Conversely, a rising OBV in the face of a declining price trend or an OBV that refuses to confirm a new stock reaction low could indicate that the smart money is moving in and a bottom may be at hand.
Courtesy of II.

Zig.
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