Volume surges is a sudden increase in trading volume - sudden increase in activity of traders. This is one of the most important factors in volume based technical analysis. Time on time we may mention about volume surges in our market commentaries as it would indicate strong increase in greedy buying when it noted to the price up-side or strong increase in panic selling when it noted to the price down-side.

As a rule sudden and strong increase in activity of traders (volume surge) would point to a strong wave of new traders coming to the market. The reasons could be different, but the main are the oversold, low-priced and under-evaluated stocks for bullish traders and overbought, high-priced and over-evaluated stocks for bearish traders. In any case, new wave of traders may lead to a shift in supply/demand balance. If this new wave of trader is strong enough (volume surge is big enough) it may take over the market and reverse a trend by creating new sentiment and by attracting new investors to its side.

Volume surges could be spotted by simply analyzing Volume MA. Some of the indicators like PVO (Percentage Volume Oscillator) and VO (Volume Oscillator) also track volume surges. However, the MVO (Market Volume Oscillator) would be one of the best indicators to reveal volume surges and also to separate bullish and bearish surges.