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To: SpongeBrain who wrote (22363)	1/6/1999 10:02:00 PM
From: oexplayer	Read Replies (1) \| Respond to of 50167

<<< When trading range narrows after a decent, is this potential breakout? I tried to look at behavior right before a breakout. Ive noticed that many times, when a stock is plummetting, its has a wide trading range. When it stabilizes, it has a much narower trading range. After the narrow range, it breaks out, as volume picks up. Is this correct? Does anyone else have any observations to add to this? Also, how does volume come int play? ie: high vs low vol. during descent, high vs. low during consolidation and during beginning of new breakout..>>> Dan, A narrow trading ranger after a fall in price is usually more a sign of consolidation! A breakout only occurs after a previous high has been surpassed! Now, volume plays a key role in breakouts as it often confirms the move is real! After a steep decline in price, prices often stabilize and either continue to decline, or begin a new uptrend. Technical Analysis helps in determining changes in trends, and volume confirms these changes. "Volume leads price", is an old cliche used by many! During a consolidation phase, volume tends to dry up until the new trend begins to take shape! Volume tends to pick-up when the trend resumes, and is often an indicator of how healthy this move will be. Very heavy volume (at least 2X) is very likely confirming the trend! Most breakouts are false due to the lack of volume. That's why many professionals "fade" breakouts! When volume is heavy and a stock breaks a prior resistance or support, the move is usually sound, and can be seen as a continuation or reversal, depending on the situation! Hope this helps!!!!! Kevin