What The Largest Stock By Dollar Volume Amazon (AMZN) Tells Trader’s About The Market

Does high dollar volume always mean rising price momentum? Of course not. Case in point is Amazon that actually has a price that has been trending down.  Check out the Friday 10-16-2020 1 day chart below:

Amazon (AMZN) 1 Day Price Chart
From Yahoo Finance

Subtly this stock is trending down if you look at its 5 day average.  Other high dollar volume stocks that are trending up instead of down are Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). The trend up or down for these high dollar volume stocks can be long  and slow to build. Patience is needed, and they are worth investing in (holding for a long time) and are not good for trading (selling quickly).

On the other hand stocks that are good for trading are usually small cap stocks like JAKKS Pacific, Inc. (JAKK), and Ocean Power Technologies, Inc. (OPTT). Small caps like these two stocks can be traded for a good gain intraday. If the right entry point is entered then even if ultimately the stock drops in price by end of day a profitable exit point can be found.

Note: The entry entry point for JAKK and OPTT was identified on the MostExcellentInvestor.com 9:30 am - 10 am watchlist in the subscriber area.