The combined analysis of price movement and trading volume to distinguish genuine institutional buying or selling from noise.
Deeper Explanation
Price-volume action is the "footprint" of institutional activity. Institutions cannot buy or sell their full position in a day without moving the market — their activity leaves volume signatures over days and weeks. Key patterns: Up days on rising volume (accumulation), down days on rising volume (distribution), tight price consolidation on low volume (absence of selling pressure, coiling for a move), wide price ranges on high volume (volatility and indecision). O'Neil developed an entire visual language — the base pattern — for reading price-volume action over weeks and months to identify where the best institutional accumulation has occurred before the breakout.
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