We have already discussed that volumes plays an important role in any movement in stock or underlying asset. Sometimes along with volumes, volatility also plays an important role in next major move or may be reversal.
Now lets see how these play an important role trend reversal. Recently Reliance Communication Ltd (NSE ~ RCOM) get tripled in less than 35 trading sessions.
Lets see Volume chart first.
Below chart is before upmove started but try to focus on surge in volumes in last few sessions.
Now lets have look at after what happened after trendline breakout.
Now we can see actual accumulation in stock started near to 10/- and then slowly slowly volumes increase lead to more accumulation of stock and then whatever happened next is history.
Also lets have look at volatility of this stock in derivative space.
After breakout (present previous chart) we can see that there is huge surge in volatility and then it resulted into more upmove in stock except 1 day in-between.
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