How Volumes can confuse a trader

Volumes in a stock are very crucial in Technical analysis, and are generally followed by all good analysts. However, just as a chart can look different in different time frames, volumes too can be interpreted differently.

There was an example of this in DLF on NSE today. Anyone who studies only daily charts, would see that DLF declined 5.5% and with a 35 day high volume figure of more than 2.55 crores. This number is also 2.5 times the 20 day average.



This is bearish for the stock.

However, a peek into the intra day chart gives a completely different picture. The 15 min chart shows that DLF crashed from 216 to 197, and rose back fast. The rising volumes were far more than the declining volumes.



Anyone who follows hourly charts will treat this as a bullish sign.

As they say on Twitter #youprefer