Ask Colin

Is it usual for a growth stock to lose volume and excitement in a congestion phase?

The short answer is yes. What happens is that these stocks shoot up the chart and get over valued. They are so good, that the market sees the over valuation, but is reluctant to sell them. So they start to drift sideways. Sellers are reluctant to sell and buyers will not pay more, so trading dries up. Hence low volume. When the company produces some more growth, the market will start rising again on good volume.

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