Playing the game of Clue

Looking for clues in the market each day – for direction and money flow – is one of the key things that demands focus. It is often difficult to find a clear-cut clue with so many correlations and stocks running in lock-step.

Some times however you come across something that is quite obvious. Today I was watching the 5 minute chart for NANO (Nanometrics Inc) and noticed the massive volume building (the BIG RED bar). Certainly a clue that money flow is occurring – OUT.

So why is this helpful? To me, an outsized move in price is a nice clue – often a reason that I put a stock on my “to fade” list. But an outsized move in volume is also a nice clue that there is action in a stock and thus worth investigating.

Here is the chart I am watching today (current):

The volume change is so dramatic that it would be impossible to miss. The RSI buy points are pretty clean.

And I think the Butler did it.

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