On Balance Volume (OBV) - Technical Analysis from A to Z
On Balance Volume ("OBV") is a momentum indicator that relates volume to price change.
On Balance Volume is a running total of volume. It shows if volume is flowing into or out of a security.
When the security closes higher than the previous close, all of the day's volume is considered up-volume.
When the security closes lower than the previous close, all of the day's volume is considered down-volume.
Volume - Technical Analysis from A to Z
Volume is simply the number of shares (or contracts) traded during a specified time frame
(e.g., hour, day, week, month, etc). The analysis of volume is a basic yet very important element of technical analysis.
Volume provides clues as to the intensity of a given price move.
Volume can help determine the health of an existing trend. A healthy up-trend should have higher volume on the
upward legs of the trend, and lower volume on the downward (corrective) legs. A healthy downtrend usually has
higher volume on the downward legs of the trend and lower volume on the upward (corrective) legs.