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Intel Corporation Message Board

  • booman587 booman587 Jun 11, 2013 4:44 PM Flag

    Textbook Case: Low Volume Pullback

    After the close, I was doing some post-game analysis and happened to notice today's volume was about 26million where average volume is about 44million. Considering that we had a pullback today (not a big one [only down $0.30/1.20%], but a pullback nonetheless), I decided to look up some official textbook-style as-close-to-fact-as-it-gets statements on a low volume pullbacks and what they can indicate in an effort to solidify (or reject) my belief that a slight pullback on low volume is good for longs in the grand scheme of things as it is a sign of relative strength. Long story short, Investopedia basically confirms that today's price action for Intel is practically a textbook case of a "low volume pullback". Please look up "low volume pullback" for yourself on investopedia if you feel the need. (Pasted Below)

    Do as you wish, but I'm going with the academic approach on this investment and taking today as a confirmation that our uptrend with Intel is far from over. I'm been told many times before that trading emotionally can get you into a lot of trouble as hedge funds, computer trading programs, etc. are structured around taking advantage of those that trade on emotion.

    That said, I think that this textbook verification is enough for me to stay long on INTC.

    The following is the Investopedia definition of "Low Volume Pullback":
    "Definition of 'Low Volume Pullback'
    A technical correction toward an area of support that occurs on lower-than-average volume. The low volume is a signal to traders that the trend is not reversing and that it is only the weak longs looking to lock in a quick profit. Frequent moves that occur in the opposite direction of a trend, which are accompanied by low volume, are normal fluctuations and generally deemed to be insignificant. On the other hand, a large spike in volume in the opposite direction of the trend could be used to signal that the smart money is starting to look for the exits and that the trend is getting ready to reverse."

    Sentiment: Strong Buy

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28.64+0.42(+1.49%)Feb 12 4:00 PMEST