I've been weeding through scores of cannabis companies looking for a hit (double pun: 500 pts.). Canadian Cannabis Corp. CCAN jumped 34.25% today. There are no positive reports I can find and the volume was light. In those conditions is the increase a good or a scary thing? Some say light trading and a substantial increase indicates a valid increase in value.
Everything in the market is based on having an owner of the stock (seller) willing to sell at a price the buyer is willing to pay for it. Typically the seller is getting out because the company is no longer attractive to them, or taking profits, think it's going to fall or other types of reasons like that. The buyer thinks the seller is wrong and is willing to pay as they think it will be going up. So, say the owner of a 25 dollar stock puts in an order to sell that stock at 26 and the buyer has a buy order at 24. That sets the bid at 24 and ask at 26. Now who will give? That determines if the stock will go up or down. The number of sellers and number of buyers with the amount of shares they trade make up the volume. Each stock establishes an average 30 day volume in trading. When the day's volume is higher then the average that is a signal that something might be happening. The direction of the price on higher then average volume is what some look for as a signal. It should be pointed out though that this is not a good enough indicator to stand on it's own for entry/exits.
The haggling is done by either the seller lowering the price on his sell order or the buyer raising his bid on the buy order.
