Volume analysis is often an under-rated indicator. If Volume is normal, it really doesn’t say much. But when you see something out of the ordinary, like very high on a given day, you must conclude that Smart Money is active. And the trick is to judge whether that high Volume was buying or selling volume.
Here is a great example of volume analysis on GOOG. In this video, we noticed that GOOG volume had doubled its normal amount. Now, the question always is – whether this volume was buying or selling. There are a couple of signals you can read to determine whether this volume was buying or selling. And of course, the best confirmation is always what happens the next day or the next few days.
Here is a video that describes this analysis, and we took a bearish trade on GOOG right after we spotted this action, which had already achieved 50% of the max return on this trade. The video itself is old, but gives a very good idea of how Volume analysis can be very helpful to understanding the current state of the stock.