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easy or difficult it would be to sell the stock. Stocks with higher volumes are regarded as preferable as investors can get in and out of them with ease. Volume plays an important role in the technical analysis. For example, a stock rising on the volume of 10,000 shares can drop a lot faster than a stock rising on a volume of 10 million shares. In effect volume becomes a great foundation behind supporting a stock price. The stock rising on a volume of 10 million shares is more resistant to price drops because the many investors who pushed the stock price higher would be unwilling to sell their shares at a loss. The other stock rising with just 10,000 shares traded may not have the same resistance. Of course, volume should also be considered as the percentage of the outstanding shares. If the company with the volume of 10,000 shares has one million shares outstanding, while the other with the volume of 10 million shares has one billion shares outstanding, both volumes indicate 10% of the total outstanding shares. So both stocks may offer the same amount of downward resistance in this case.

Price Graph - Forecasting a stock's possible direction by just comparing its current price to its 52-week high and low prices is simplistic and naive. A better way to look at the movement of a stock is to capture its price at regular intervals and then generate a graph from this data. The period can be as short as a minute or as long as 20 years, depending how short or long-term you would want the graph to be. The chart itself can be as granular or as coarse as you require. For example, there are daily, weekly, 3-month, or 20-year charts, and many in between. The point is that by studying the graph, one may be able to discover a pattern or trend in the stock price. The trick then is to recognize the initial signs of a pattern in order to act on the stock before it is too late. A chart that shows a stock rising 10% every four months could help the investor make a buy decision before it rises again. Or perhaps the pattern that indicates a stock immediately dropping 5% …