1. What is OBV?
On-Balance Volume, OBV, measures buying and selling pressure through a cumulative volume total. It adds volume on up days and subtracts it on down days.
2. Interpretation
- Rising OBV and rising price: Confirmation of a healthy uptrend in this framework.
- Rising OBV and sideways price: A possible approaching upside breakout.
- Falling OBV and rising price: A weak advance; watch for reversal.
3. OBV divergence
📊 Key signals
Price makes a new high while OBV does not → bearish divergence, interpreted here as a sell signal.
Price makes a new low while OBV does not → bullish divergence, interpreted here as a buy signal.