Negative volume development

Both volume balance and correlation between price development and volume development are negative. This indicates that sellers are many and aggressive, while buyers are hesitant.

Both volume balance and correlation between price and volume development are considered important indicators. They are often used alongside trend analysis and other indicators based on the stock price.

When both of these are negative at the same time, it signals increasing pessimism among investors. Volume will often trigger signals early – even before the increasing pessimism triggers falling prices.

The following applies to negative volume development:

• Strengthens a sell signal
• Weakens a buy signal
• Indicates that investors are negative and the falling trend will continue
• Indicates that buyers are passive, a rising trend is ending and a trend reversal is near

Generally negative volume development warns of falling trends to come. Negative volume indicates weak buyers and aggressive sellers, and thus increasing pessimism in the investors’ view of the stock. Such a stock is indicated to continue falling.