The law of supply and demand has been governing the stock market since its inception more than 200 years ago. While the emergence of hedge funds and high-frequency algorithmic trading has skewed volume to some extent, stocks still go up when buyers overwhelm sellers. And they go down when sellers dominate buyers.
The same is true for the major stock indexes.
Investor's Business Daily's volume percentage change calculation reveals when volume is particularly heavy in a stock. A big increase in trading volume is often the result of institutional investors like mutual funds, banks and pension funds buying or selling shares. If you see a stock where the volume percentage change totals 100% during a trading session, that means it's on pace to double its normal daily market activity.
It's easy to find stocks rising in heavy volume every day on the homepage of Investors.com using the Stocks On The Move screen. Volume data is continuously updated throughout the trading day. To qualify for listing, several screen parameters are used, including stocks with Earnings Per Share and Relative Strength ratings of at least 70.
Stock Market Volume: Where The Big Money Goes
As money starts to rotate out of several top-rated growth stocks, this is an important screen to monitor to see where institutional money is rotating. When a mutual fund starts to build a position in a stock, it can often happen over several weeks. So an initial volume burst in a stock can presage even more heavy-volume gains down the line.
Stocks falling in heavy volume are available by clicking the "Down in Price" tab. Walmart appeared on this screen Thursday, when volume was tracking more than 400% above average. Big sellers were in the stock after Walmart reported disappointing earnings.
The accompanying image shows some stocks that traded in heavy volume early in Wednesday's session. Biotech stocks have started to see increased money flow, so it was no surprise to see Rigel Pharmaceuticals in there.
At the time, volume was more than double the normal average compared with the same time Tuesday. It's been in a major accumulation phase since the stock started its move earlier in the month.
Meanwhile, a couple of Chinese stocks — Futu Holdings and Kanzhun — also made the cut in Wednesday's screen. Both stocks followed through with more heavy-volume gains Thursday.
The volume percentage change calculation also appears at the top of the homepage for Nasdaq and New York Stock Exchange volume. It tells you if volume is particularly heavy on any given day.
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