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| '''On-balance volume''' ('''OBV''') is a [[technical analysis]] indicator intended to relate price and volume in the [[stock market]]. OBV is based on a cumulative total volume.<ref name="Granville" /> | | Jayson Berryhill is how I'm called and my spouse doesn't like it at all. Distributing production is exactly where my main income comes from and it's some thing I truly enjoy. [http://cspl.postech.ac.kr/zboard/Membersonly/144571 online psychics] It's [http://www.january-yjm.com/xe/index.php?mid=video&document_srl=158289 psychic readings] not a typical thing but what she likes performing is to play domino but she doesn't have the time recently. For years he's been residing in Alaska and he doesn't strategy on changing it.<br><br>Look at my website - [http://kard.dk/?p=24252 authentic psychic readings] |
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| ==The formula==
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| : <math>
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| OBV = OBV_{prev} + \left\{ \begin{matrix}
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| volume & \mathrm{if}\ close > close_{prev} \\
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| 0 & \mathrm{if}\ close = close_{prev} \\
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| -volume & \mathrm{if}\ close < close_{prev}
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| \end{matrix} \right.
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| </math>
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| Because OBV is a cumulative result, the value of OBV depends upon the starting point of the calculation.
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| ==Application==
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| Total [[volume (finance)|volume]] for each day is assigned a positive or negative value depending on prices being higher or lower that day. A higher close results in the volume for that day to get a positive value, while a lower close results in negative value.<ref>[http://www.oxfordfutures.com/futures-education/tech/on-balance-volume.htm ''On Balance Volume ( OBV )'']. 22 September 2007.</ref> So, when prices are going up, OBV should be going up too, and when prices make a new rally high, then OBV should too. If OBV fails to go past its previous rally high, then this is a negative [[divergence]], suggesting a weak move.<ref>[http://financial-edu.com/on-balance-volume-obv.php OBV Behaviorial Limitations and Formulas] at Financial-edu.com.</ref>
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| The technique, originally called "continuous volume" by Woods and Vignola, was later named "on-balance volume" by [[Joseph Granville]] who popularized the technique in his 1963 book ''Granville's New Key to Stock Market Profits''.<ref name="Granville">Joseph E. Granville, ''Granville's New Strategy of Daily Stock Market Timing for Maximum Profit'', [[Prentice Hall|Prentice-Hall, Inc.]], 1976. ISBN 0-13-363432-9</ref> The index can be applied to stocks individually based upon their daily up or down close, or to the market as a whole, using breadth of market data, i.e. the advance/decline ratio.<ref name="Granville" />
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| OBV is generally used to confirm price moves.<ref>[http://www.investopedia.com/terms/o/onbalancevolume.asp What Does On-Balance Volume Mean]</ref> The idea is that volume is higher on days where the price move is in the dominant direction, for example in a strong uptrend more volume on up days than down days.<ref>[http://stockcharts.com/education/IndicatorAnalysis/indic-OBV.htm StockCharts.com article on On Balance Volume]</ref>
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| == Similar indicators ==
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| Other price × volume indicators:
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| * [[Money flow]]
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| * [[Price and volume trend]]
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| * [[Accumulation/distribution index]]
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| == See also == | |
| * [[Dimensional analysis]] — explains why volume and price are multiplied (not divided) in such indicators
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| == References ==
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| {{Reflist}}
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| {{technical analysis}}
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| [[Category:Technical indicators]]
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| [[Category:Dimensional analysis]]
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