Abstract:
This study focuses on the relationship between stock prices and trading volume. The study is based on the one hundred largest cap companies listed on the NASDAQ starting from June 01, 2010 to Dec 31, 2012. The study shows that trading volume has significant impact on the stock prices. It also shows positive correlation between stock prices and trading volume; and forecasting stock prices in short-term by studying the past trading days. It’s important to know that stock prices can be influenced by a variety of factors besides trading volume but investors should consider trading volume when making a trading decision.