Volume Spike Alert

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

Copyv > sma(v, 20) * 2 and abs(roc(1)) > 2

How It Works

1. v > sma(v, 20) * 2 - Volume is 2x its 20-day average
2. abs(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

Copyv > sma(v, 20) * 3 and abs(roc(1)) > 3 and f.market_cap > 1B

• 3x volume (very unusual)
• 3%+ move (significant)
• Large caps only (institutions moving)

Early Detection

Copyv > sma(v, 20) * 1.5 and abs(roc(1)) > 1.5

• Catches smaller spikes before they go parabolic
• More signals but noisier

Bullish Only

Copyv > sma(v, 20) * 2 and roc(1) > 2

• Removes abs() to only find upside moves
• Good for breakout trading only

Bearish Only

Copyv > sma(v, 20) * 2 and roc(1) < -2

• Only shows downside volume spikes
• Useful for short selling or avoiding positions

Example Columns to Add

CopyPrice: 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

1. Volume spike appears on scan
2. Price breaking resistance
3. Enter on pullback to breakout level
4. Stop below support

Reversal Entry

1. Volume spike at support
2. Wait for confirmation day
3. Enter when price closes green
4. Stop below spike low

Avoid Entry

1. Volume spike at resistance (rejection)
2. Spike on bad news (more selling likely)
3. 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

Copyv > 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

1. Chasing volume alone - Need price confirmation
2. Ignoring direction - Volume can be selling pressure
3. No catalyst research - Check why volume spiked
4. Overstaying - Volume spikes are short-term events
5. Buying the second spike - First spike is best, second often fails

Combining with Other Indicators

Volume + RSI

Copyv > sma(v, 20) * 2 and rsi(14) < 30 and c > sma(200)

Volume spike at oversold = potential capitulation

Volume + MACD

Copyv > sma(v, 20) * 2 and cross_above(macd(), macd_signal())

Volume confirms MACD crossover signal

Volume + Moving Average

Copyv > 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