tailieunhanh - Applying volume spread analysis to the analysis of stock price spread on Ho Chi Minh city stock exchange

The instabilities of the world economy have greatly affected the Vietnamese stock market. Changes in macroeconomic policies, effects of the tight-money policy, banking bad debts, flows of credits to brokers, and regression in realty market bring concerns rather than expectations to investing community. | ECONOMIC DEVELOPMENT No. 204, August 2011 APPLYING VOLUME SPREAD ANALYSIS TO THE ANALYSIS OF STOCK PRICE SPREAD ON HO CHI MINH CITY STOCK EXCHANGE by Dr. TRAÀN THÒ THUØY LINH* The instabilities of the world economy have greatly affected the Vietnamese stock market. Changes in macroeconomic policies, effects of the tight-money policy, banking bad debts, flows of credits to brokers, and regression in realty market bring concerns rather than expectations to investing community. These issues considerably influenced transactions in the Vietnamese stock market in the first quarter of the year and caused falls in VN-Index. On May 25, 2011 VN-Index was down to a record low of points in the first two quarters. This has profoundly influenced the mentality of investors and increased herding behavior on the market transactions. Keywords: volume spread analysis, stock price manipulation, professional traders 1. Insight into Volume Spread Analysis (VSA) Most traders are aware of the two widely known approaches used to analyze a market, fundamental analysis and technical analysis. Many different methods can be used in each approach, but generally speaking fundamental analysis is concerned with the question of why something in the market will happen, and technical analysis attempts to answer the question of when something will happen. VSA is a study that focuses on volume and stock price spread. With different trends in price spread, a combination of candlestick-shape analysis and volume analysis may help investors judge price spread better and partly understand the behavior of other participants in the market. Thereby, it enables investors to improve judgment on stock price spread, especially in the event that stock prices show signs of being manipulated. VSA analyzes volume and price spread in order to examine their mutual influences in smart money differencing. (Smart money is activity of professional operators and market 12 RESEARCHES & DISCUSSIONS planners within