Volume Analysis Report: PARR

Executive Summary

Overall Signal: NEUTRAL
Confidence Level: Medium
Analysis Date: 2025-11-10 23:20:16
Primary Signal: WEAK_SELL

📊 Executive Summary Table

🏛️ Institutional Interpretation

The VWAP data indicates that the current price of PARR is 2.59% above the VWAP, suggesting a level of caution as we are in a potential distribution phase. However, the rise in OBV by 685,596 over 10 days signals strong buying pressure, which is a bullish indicator.

The volume quality ratio over the past 90 days is 1x, indicating a balanced activity between institutional buyers and sellers. This aligns with the transitional market phase with a weak sell signal. The fact that the accumulation strength (31.6%) is almost equal to the distribution strength (38.5%) further supports this neutral sentiment.

🎯 Entry Strategy with Volume Confirmation

Primary Entry Level: Wait for a pullback towards the VWAP level at $42.23 and ensure that OBV continues to rise, confirming buying pressure.

Secondary Entry Level: If price breaks above today’s high at $43.82 with increasing volume, this could signal a continuation of the uptrend.

Volume Confirmation Threshold: A 10% increase in volume on the day of entry.

Timeframe for Entry Validation: If the above conditions are met within the next 5 trading days, the entry is validated.

🛡️ Risk Management Framework

Stop-Loss Level: Place the initial stop-loss 2-3% below the VWAP level, at around $41.38, to account for volatility.

Position Sizing: Considering the medium confidence and volatility, a reduced position size is recommended.

Risk/Reward Ratio: Based on the entry at VWAP, stop-loss, and a conservative target at the recent high of $43.82, the risk/reward ratio is approximately 1:3.

Portfolio Allocation: Due to the neutral institutional sentiment and medium risk level, it is advisable to limit exposure to no more than 2% of the total portfolio.

🎯 Price Targets & Timeline

Conservative Target: $43.82, which is the recent high.

Aggressive Target: If volume and buying pressure continue to build, a price of $45 could be achievable under favorable conditions.

Expected Holding Period: Given the swing trading focus, a holding period of 2-4 weeks is expected.

❌ Invalidation Criteria

The analysis would be invalidated if:

• There is a significant drop in volume, particularly on up days.
• The price breaks below the stop-loss level.
• OBV trend reverses and starts to decline.
• The market phase shifts back to strong distribution.

📚 Educational Theory Section

Volume Analysis Theory:

In volume price analysis (VPA), the volume of a security is closely studied to identify the movements of institutional investors, also known as “smart money”. This is crucial as these large investors often dictate the future movement of prices.

On-Balance Volume (OBV) is a useful tool to measure buying and selling pressure. It adds volume on ‘up’ days and subtracts volume on ‘down’ days. In our analysis, an increasing OBV indicates strong buying pressure. Learn more about OBV here.

Volume-Weighted Average Price (VWAP) is the average price a security has traded at throughout the day, based on both volume and price. Institutional investors often use VWAP to assess market direction. Learn more about VWAP here.

Market Microstructure:

Understanding market microstructure, including the patterns of accumulation (buying) and distribution (selling), can provide valuable insights into what the smart money is doing. This is often studied through the lens of the Wyckoff Method, which you can learn more about here.

Statistical Analysis:

In our analysis, we used volume quality ratios to assess the balance of buying and selling activity. We also used calibrated thresholds to detect institutional behavior.

Risk Management Theory:

In our risk management, we used the principles of the Kelly Criterion for position sizing and ATR-based stops for setting our stop-loss level.

Swing Trading Framework:

Our focus is on swing trading, which typically involves a holding period of a few days to a few weeks. We use volume confirmation signals for entry timing and volume exhaustion patterns for exit strategies.

Recommended Reading:

For further learning, consider the following books:

• “Volume Price Analysis” by Anna Coulling
• “Trading in the Zone” by Mark Douglas
• “Market Wizards” by Jack Schwager
• “Technical Analysis of the Financial Markets” by John Murphy

Technical Specifications

• Total Candles Analyzed: 501
• Data Quality: sufficient
• Analysis Version: Comprehensive Market Phase Analysis v2.0
• Investor Profile: professional

Professional volume analysis generated by SwingTrader AI on 2025-11-10 23:20:54 UTC