Volume By Price

Volume by price (a horizontal histogram that overlays a price chart. The histogram bars stretch from left to right starting at the left side of the chart. The length of each bar is determined by the cumulative total of all volume bars for the periods during which the closing price fell within the vertical range of the histogram bar - stockcharts.com) can be a useful indication of where price feels most 'comfortable'. More specifically, it can be used as a way to determine support and resistance levels.

You can see in this 20 day view of SPY (click left) that price is not very comfortable around 142, signifying overhead resistance at that price. Conversely, based on volume by price (VBP), there is support at 138.5. SPY continues to be range bound yet at a critical level - I'm still mostly on the sidelines waiting for a breakout.



Notice how different things look on SPYs yearly chart.