| Money
Flow |
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Calculated
by averaging the high, low and closing prices and multiplying by the
daily volume. Comparing that result with the number for the previous
day tells you whether money flow was positive or negative for the
day.
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When a stock is purchased at a higher price (an uptick), this is
considered positive money flow. When the next trade is at a lower
price (a downtick), this is considered to be negative money flow.
Throughout the day if more shares were bought on the uptick than the
downtick, net money flow is positive because more investors were willing
to pay a premium for the stock. If money flow is negative when a stock's
price is rising, this could spell trouble. |
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Dictionary
