By monitoring price and volume action in both our stocks and the indices, we may be able spot early signs of weakness and in turn protect our capital. In this week’s webinar “Analyzing Market Weakness: Stalling and Churning,” Product Coaches Jason and Irusha went over identifying potential weakness in stocks and indices through technical analysis.

 

One of those potential signals is stalling and churning price action. Stalling or churning is when a stock makes little progress while volume increases. This is a negative sign that could  signal that the stock is in trouble.

 

This type of analysis also works for analyzing the market indices. A failed rally that begins to stall could be a warning of future distribution.

 

Here is what stalling or churning looks like on a MarketSmith chart:

 

To learn more about stalling and churning, watch our full webinar by clicking here. You can also reach us, at (800) 424-9033 or at reachus@marketsmith.com. Follow us on Twitter, StockTwits, and Facebook for the latest MarketSmith updates.

 

 

Best returns,

 

The MarketSmith Team