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Paul Singh
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Paul has joined forces with to provide a detailed nightly swing trade report featuring market analysis, trade setups, education and watch lists. In addition, Paul writes the popular blog, The Market Speculator (, a diary of a... More
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  • Strategy Session: Using Distribution Patterns to Predict Trends and Trend Failure 0 comments
    May 20, 2009 2:12 PM | about stocks: GME

    The second most important aspect of my trading strategy (behind support and resistance) is using volume to classify stocks that are under accumulation and distribution.

    Distribution is under way when, over a period of time, stocks show higher volume on down days and lower volume on up days. In a bullish trend, this predicts the trend will pullback or fail. In a bearish trend, expect the trend to continue until the distribution pattern is reversed.

    Take a look at GME. This stock shows classic distribution. During the recent uptrend, positive volume was putrid. Trend failure was easily predicted. Currently, the distribution pattern is continuing. This suggests a retest of recent lows.

    I will likely short this stock soon.

    Stocks: GME
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