by John C. Lawlor
Historically, volume has had only modest use as a technical analysis factor, even though volume, or
the magnitude of volume, is a most respected market force. Every day, the 15 most active stocks are
listed—a subtle tribute to volume. Most technicians, when referring to price relationships, state that a
large move in price should be on increased volume.
Cumulative Volume (CV) as treated in a recent article in Stocks & Commodities (June 1986), is one basic
measure of volume. The first important requirement for studying CV is to co-plot it with price. The scale
for CV must be properly proportioned so that price and CV will tend to track together for portions of the
chart. In addition, the option must be available to vary the CV scale, and to vary the point where price
and CV are tied together (coincident). This provides the option of studying divergence over any portion
of the chart.