I'm interested in the predictive power of intraday charts and was hoping people might share their views on the subject. What can the intraday movements of stocks tell us and can they be used to predict the next days price action?
As an example, lets look at todays SBM chart (see attachment). At 12:00pm today SBM announced that they had made a new gold discovery at Tower Hill, Leonora. After trading resumed shortly after, SBM traded on heavy volume and rose from 44 cents to 50 cents by 1:00pm, less than an hour later. Between 1:00pm and 4:00pm SBM stabilised on moderate volume and fluctuated between 48 cents and 50 cents until the close of trade, finishing at 49 cents. Does the fact SBM stabilised on moderate volume during the afternoon indicate a lack of sellers? If so, is this likely to continue tomorrow?
What can the intraday movements of a stock teach us and can these movements be predictive? How important is it that a stock finish on or near its high for the day? How important is volume? Do intraday support and resistance levels exist... and if they do, what can we learn from them? How does market depth fit into all this? What influence do announcements have?
Am interested to hear people's views on this topic.