For Immediate Release
Chicago, IL – March 28, 2023 – Today, Zacks Investment Ideas feature highlights Nvidia NVDA, Advanced Micro Devices AMD and Walker Dunlop WD.
Price & Volume: Anatomy of a True Market Leader
Price & Volume Are Key Elements
Studies show that as much as 60% of the human body is comprised of hydrogen and oxygen (water). Said another way, without water, humans cannot survive very long. In the stock market, the elements that comprise a true market leader are strong price and volume trends. Without these two critical ingredients, a stock is unlikely to trend higher.
Monitoring price and volume (or supply and demand) is vital for an investor because it can provide valuable insights into the behavior of the general market and individual equities, such as clues of:
· Institutional Accumulation: When a stock shoots higher on expanding price and volume, it can be a clue that an institution is accumulating a position. For example, after its last earnings report, Nvidia gapped higher by 14% on volume 129% above the norm.
Nvidia traded a mind-blowing 111 million shares in the session. Because such a large number of shares is impossible for retail investors to buy, the demand was indicative of institutional investors like mutual funds, banks, and pension funds. Remember, institutions move stocks, not retail.
· A Strong Pullback: As any experienced investor knows, no stock goes straight up. For this reason, investors can gain valuable information by monitoring how a stock pulls back. Shallow pullbacks on low volume are a sign of digestion, not downward conviction. Often, the strength of a stock is revealed in the pullback, not the advance, such as in the case of Advanced Micro Devices.
· Weak Rallies: When a stock moves higher on low volume, it should raise cautionary flags for investors. Rallies like this signify that while the stock is moving higher, conviction is low. A good recent example is Walker Dunlop.
Takeaway
Similar to how a doctor consoles an X-Ray for pertinent information, investors look to price and volume charts to reveal important patterns. Charts help investors to identify institutional accumulation from low conviction accumulation. Furthermore, they allow investors to separate strong pullbacks from weak ones. As the old saying goes, “a picture is worth a thousand words.”
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Walker & Dunlop, Inc. (WD) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
