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EquiVolume is a price box based on the high, low, close and volume. The high and low define the height of the box, the close defines the color and volume defines the width. EquiVolume boxes are black when the close is above the prior close and red when the close is below the prior close. Chartists can apply normal technical analysis to EquiVolume charts. Moving average, support, resistance, chart patterns and other techniques work just fine. Chartists get the added advantage of having volume information right on the main price chart. This makes it easy to spot high volume moves.
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The chart above shows Flextronics with EquiVolume boxes and volume. Notice a series of wide black boxes from late October to late November. These reflect buying pressure or accumulation. The November highs established a clear resistance zone and the stock broke this zone with a surge in early December. After a support break and decline in early March, Flextronics is again showing signs of buying interest. Notice that a wide black EquiVolume box formed last week and the stock has been firming around 7.2-7.4 the last seven days. You can read more on EquiVolume in our ChartSchool article.
