Volume

Volume is the total number of shares traded during a given period — typically a day, week, or month.

It is one of the most important indicators of market activity and is displayed as vertical bars below a stock's price chart on any trading platform. High volume indicates strong interest in a stock (either buying or selling), while low volume suggests apathy or lack of conviction among market participants. What is Volume? If 5 crore shares of Reliance Industries are traded on a particular day on NSE, and another 3 crore on BSE, the total volume for the day is 8 crore shares. Volume is always compared to the stock's "average volume" — the typical number of shares traded per day over a period (e.g., 20-day average volume). A stock trading 3x its average volume signals heightened interest. Volume is used to confirm price trends and detect potential reversals. In technical analysis, the principle is: "Volume precedes price." If a stock is rising on increasing volume, it confirms the uptrend — there is strong buying conviction. If a stock is rising but volume is declining, it signals a weakening trend — the rally may not last because fewer and fewer buyers are willing to participate at higher prices. Volume spikes often accompany important price events. When a stock breaks out above a resistance level on high volume, the breakout is considered more credible and sustainable than a breakout on low volume. Similarly, a breakdown below a support level on high volume is more bearish than one on low volume, because high-volume selling indicates strong conviction from sellers. In the Indian market, volume is tracked separately for NSE and BSE. The "delivery percentage" or "delivery volume" shows what proportion of the total volume was actually delivered (shares transferred to Demat accounts) versus intraday speculative trading. A high delivery percentage (above 70%) suggests genuine investment interest, while a low delivery percentage suggests heavy intraday trading. Delivery-based investors generally prefer stocks with consistently high delivery percentages. Volume analysis is particularly useful during market extremes. During the October 2021 Nifty peak, the NSE's average daily turnover hit ₹1 lakh crore — historically high — signalling peak exuberance and eventual correction risk. During the March 2020 COVID crash bottom, volume spiked as panic selling peaked, which was actually a classic bottoming indicator for those who recognized it. High volume at market bottoms and low volume at market tops are contrarian signals that experienced traders watch for.