What It Detects
Stocks with:
- Volume significantly higher than average
- Price moving with the volume (not just churning)
- Potential early indicator of breakout or breakdown
- Institutional interest or news-driven moves
The Formula
v > sma(v, 20) * 2 and abs(roc(1)) > 2
How It Works
v > sma(v, 20) * 2- Volume is 2x its 20-day averageabs(roc(1)) > 2- Price moved at least 2% (up or down)
This finds stocks where something significant is happening.
When to Use
Best for:
- Pre-market research (find stocks in play)
- Intraday momentum trading
- Catching early trend reversals
- News-driven opportunities
Avoid when:
- Low float stocks (volume meaningless)
- Earnings day (expected volume, already priced in)
- End of month (rebalancing noise)
Parameters You Can Tweak
Extreme Spikes
v > sma(v, 20) * 3 and abs(roc(1)) > 3 and market_cap > 1B
- 3x volume (very unusual)
- 3%+ move (significant)
- Large caps only (institutions moving)
Early Detection
v > sma(v, 20) * 1.5 and abs(roc(1)) > 1.5
- Catches smaller spikes before they go parabolic
- More signals but noisier
Bullish Only
v > sma(v, 20) * 2 and roc(1) > 2
- Removes
abs()to only find upside moves - Good for breakout trading only
Bearish Only
v > sma(v, 20) * 2 and roc(1) < -2
- Only shows downside volume spikes
- Useful for short selling or avoiding positions
Example Columns to Add
Price: c
Chg%: roc(1)
Volume: v
Vol Avg: sma(v, 20)
Vol Ratio: v / sma(v, 20)
RSI: rsi(14)
Distance from 20MA: (c - sma(20)) / sma(20) * 100
Interpreting Results
High Volume + Breakout
Signal: v > sma(v, 20) * 2 and c > sma(20) and rsi(14) > 50
Strong bullish signal:
- Volume confirms price move
- Breaking above moving average
- Momentum positive → Potential multi-day move
High Volume + Reversal
Signal: v > sma(v, 20) * 2 and rsi(14) < 30 and c > sma(200)
Potential bounce:
- Oversold gets more selling (exhaustion)
- Volume spike = capitulation
- Long-term trend still intact → Watch for reversal next day
High Volume + Distribution
Signal: v > sma(v, 20) * 2 and c < sma(20) and rsi(14) < 50
Bearish signal:
- Selling into moving average
- Momentum negative
- High volume = institutions exiting → Avoid or short
Trading Strategies
Breakout Entry
- Volume spike appears on scan
- Price breaking resistance
- Enter on pullback to breakout level
- Stop below support
Reversal Entry
- Volume spike at support
- Wait for confirmation day
- Enter when price closes green
- Stop below spike low
Avoid Entry
- Volume spike at resistance (rejection)
- Spike on bad news (more selling likely)
- Already extended (RSI > 75)
What to Watch For
Strong signals:
- Volume 3-5x average (extreme interest)
- Clean chart pattern (not random)
- First spike in weeks (new catalyst)
- Price holding after spike (accumulation)
Warning signs:
- Multiple spikes recently (stock in play, risky)
- Spike at top of range (likely reversal)
- No price follow-through next day
- Low market cap (manipulation possible)
Intraday Usage
v > sma(v, 20) * 2 and abs(roc(1)) > 1 and c > sma(20)
Run this scan:
- Every 30 minutes during market hours
- Focus on first 2 hours (most institutional activity)
- Look for continuation patterns
- Exit before close (avoid overnight risk)
Common Mistakes
- Chasing volume alone - Need price confirmation
- Ignoring direction - Volume can be selling pressure
- No catalyst research - Check why volume spiked
- Overstaying - Volume spikes are short-term events
- Buying the second spike - First spike is best, second often fails
Combining with Other Indicators
Volume + RSI
v > sma(v, 20) * 2 and rsi(14) < 30 and c > sma(200)
Volume spike at oversold = potential capitulation
Volume + MACD
v > sma(v, 20) * 2 and cross_above(macd(), macd_signal())
Volume confirms MACD crossover signal
Volume + Moving Average
v > sma(v, 20) * 2 and c > sma(20) and sma(20) > sma(50)
Volume spike in established uptrend = strong continuation
Related Strategies
- Momentum Breakout - Use volume for confirmation
- Oversold Bounce - Volume spike = capitulation
- MACD Crossover - Add volume confirmation
Pro Tips
- Research the catalyst: Volume spikes have a reason (news, earnings, rumors)
- Watch the tape: See if buying or selling pressure (Level 2 data)
- First is best: First volume spike after quiet period is most reliable
- Set price alerts: Get notified when volume stock moves 1-2% more
- Time of day: Morning spikes more reliable than afternoon
- Market correlation: Check if spike is stock-specific or sector-wide