Accumulation's Evil Twin

Over the past several days I've been beating the drum about how important it is to watch volume. With today's Chart of the Day, I probably will have gotten it out of my system for awhile. 

As I've said before, a sign of health in a rally or upside breakout is a big surge in volume. That's what they call accumulation. 

Conversely, when I see a series of price plunges occur along with high volume, it tells me the stage is set for a stock to head lower. That's what they call distribution.

 Take a look at this chart of Immunex (IMNX | Quote | Chart | News | PowerRating). 

The two big plunges on huge volume looks worrisome and suggest a continuation of the downtrend after the bounce off Fibonacci support peters out. I'll be watching for price action to perhaps hit the top of the descending trend channel prior to a resumption of the downtrend.

Have a great weekend,

Eddie