Stock Charts: Rising Price and Falling Volume

April 12, 2021, 1:33 pm EDT

Rising Price and Falling Volume

Rising price and falling volume is not a bullish pattern from a technical analysis point of view. Especially, it is highly suspicious at the new high area (52-week high, record high). 

This is exactly what happened to all major indexes for the next 1-2 weeks where the new high was made but volume kept going lower. Internally, it means that commitment from institutional investors is missing. In other words, fewer and fewer market participants believe this rally can run higher and longer. Only a small group of traders pump up the prices. 

Thus, it is important to stay cautious at these record-high levels. 

Stay defense by holding defensive types of positions in food, REIT, utility, and keep watching market development. 

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