Keep Studying A Stock's Volume Trends After Its Breakout.(MAKING MONEY)(INVESTOR'S CORNER)

Byline: JONAH KERI

IBD spends a huge amount of time trumpeting the importance of institutional investors. They control as much as three-fourths of the market's movement. Wouldn't it be great if we could track their actions?

We can. How? Just study the weekly volume on individual stocks and the major market indexes.

Do you see several up weeks on heavy volume as the stock forms the right side of its base? That's a sign of accumulation by the big boys.

Is volume drying up as the stock forms a downward-sloping handle? That's the kind of calm action that's historically proved most successful in spawning successful breakouts.

Your diligence shouldn't stop at the breakout. You want to make sure your stock's acting in a bullish manner if you're going to hold onto it, let alone average up.

We've mentioned in this space the danger of new highs on low volume. A stock's future can certainly be cast into doubt if it repeatedly etches new highs without the accompanying volume to back it up. But a new high or two on below-average trade in the early stages of its run shouldn't trigger an automatic sell.