Normally it is penny stock. And why is this so?
2007-06-23 03:04:26 · 5 answers · asked by Protector 2 in Business & Finance ➔ Investing
Not unless you know WHY the volume is high!
BTW, it is almost NEVER advisable to spend money on penny stocks. Most of them fade slowly away. And the one that doesn't is all but impossible to guess!
2007-06-23 03:12:01 · answer #1 · answered by Anonymous · 3⤊ 0⤋
High volume will only affect the stock for a short time. Passion will drive the price up and fundamentals will drive it back down. If a company isn't creating more, selling more, creating better profits, increasing its market share, etc. there is no reason for it to sustain a higher price yielding from higher trading.
The volume may be higher due to a news release or analysis stating that the stock should go up for some reason or the expected release of a new product, innovative service, etc.
If the insiders are causing the higher trading volume (by buying more stocks on the open market) there may be a good reason to get in. Insider selling is not necessarily an indicator in any direction, if that is the case.
Essentially, you shouldn't buy based on trading volume alone. Is the stock cheap versus its worth? Does it meet the requirements for purchase according to your trading strategy? If so forget the volume and buy because you would buy it even if it weren't trading at high volume.
2007-06-23 03:17:19 · answer #2 · answered by Taurean W 4 · 0⤊ 0⤋
If it's a penny stock, it probably doesn't mean anything. Most penny stocks are manipulated, and there's very little chance of making money on them.
With normal stocks, it is generally considered a good omen if you have high volume on an uptrend and a bad sign if you have high volume when a stock is dropping in price.
2007-06-23 03:14:29 · answer #3 · answered by skip742 6 · 1⤊ 0⤋
in more normally priced shares, unusually high volume usually means that a change in character [a change in trend] is underway if the action is confined to that issue.
I'm not a plunger in penny stocks ... too much risk that you'll run afoul of someone's pump and dump scheme.
so, my experience isn't directly useful ... watch yourself there -- I'll bet the shares are usually pretty illiquid.
GL
2007-06-23 03:12:30 · answer #4 · answered by Spock (rhp) 7 · 1⤊ 0⤋
usually penny stock is very risky , and manipulated and your question sound risky and too late .generally , you have to know : volume up price up ?
volume up price down ?
volume down price up?
voume down price down ?
2007-06-23 04:07:44 · answer #5 · answered by Anonymous · 0⤊ 0⤋