Lynn,
Volume is important in a number of ways. A stock that moves either up or down on volume, may be in for a significant future move in that same direction. For the move to last however, it needs to be confirmed by another move on up volume as well, usually within a few days to a week.
For example, CPQ may break out of a base or an ongoing trend on volume and then drift either up or down a bit on lower volume for a few days. Then it will spike again, usually in 2 - 7 days on volume and this can be considered confirmation of the breakout. There are of course tons of caveats, but you get the idea.
While volume and TA are important, I see NAVR as a news driven stock and the only thing volume tells me is that when it comes in heavily, this baby MOVES. TA types will tell you that this fits the scenario above, but I would present the arguement of which comes first, the chicken or the egg. If you look back to the days in past months where NAVR really moved up or down in price, you will see some HUGE volumes that make the normal 3MM look like nothing. That's going to happen when the IPO is announced. With the small float, you will see big rise in price on that volume.
I'm not a TA expert, so anyone feel free to chip in here.
Dave |
