OBV

On Balance Volume

On-Balance Volume (OBV) measures buying and selling pressure based on volume. It adds volume to a running total when the price closes higher and subtracts volume when the price closes lower. The OBV helps identify potential trend reversals or confirmations. A rising OBV suggests increasing buying pressure, signaling a potential uptrend, while a falling OBV signals increasing selling pressure, indicating a potential downtrend. Traders often use OBV in conjunction with price movements to spot divergence or confirm trends, helping to predict future price direction.