William O'Neill has been my mentor when it comes to reading price and volume action when it comes to stock charts, specifically, his books "How To Make Money In Stocks", and "The Successful Investor". I strongly suggest reading one or both of those books. Price and volume give you a visual picture of the most important factor in whether a stock's price goes up or down: Supply and demand. When buying outweighs selling, price will go up, and when selling outweighs buying the price will go down. O'Neill does not use technical indicators on his charts, simply price and volume bars. I like to look at Chaikin Money Flow, although it is nowhere near a perfect indicator, it does give a rough idea of whether or not money is coming into a stock.
Above is a year chart of the QQQQ. O'Neill has a concept he calls the "distribution day", which is when an index drops (I don't have my books handy, so I can't remember the exact amount, but my memory tells me 0.7%) on higher volume than the previous day. In May and June, I highlighted the distribution days. O'Neill says that 4 or more in the span of a few weeks can mean trouble, and here it did, although the Q's kept in an uptrend for another month. CMF also declined, indicating that money was flowing out of the index. In mid-July, there was a nasty reversal, followed by several days of high volume selling., then in mid-August, aday when price hit a low and bounced up. Volume was the highest yet, but since the closing price was near the top of the range, indicating that most of that volume was buying. That is one reason why looking at price and volume together is so important.
The October rally also showed high volume distribution as it go closer to the top, indicating a reversal was imminent, and it came. We didn't get a bottom reversal until January 22. Since then we have had a rally attempt, but if you look at the volume on the down days, for the most part it has been higher than on the up days.
To Summarize. I look at a few factors here. One is how much greater is today's volume compared to it's average volume. I use the 60dema on stockcharts.com (the default value), but others like different values. Experiment to find the one best for you. I look at where the price closes (upper range or lower range) to determine where the main pressure is coming from. Most of the volume comes in the first and last hours of the trading day, and often the pressure coming late in the day is the better indicator of where the money is going. Several days of high volume selling or low volume buying in an uptrend is a warning that the trend is about to reverse. Low volume selling or high volume buying in a downtrend usually means that is about to reverse as well.
Charts courtesy of stockcharts.com